China Trademark Review 2014
Typical Case Analysis
In-depth Researches
Hot Topics and Tips
Beijing East IP Ltd. Beijing East IP Law Firm
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Disclaimer: The materials and information in this booklet are produced by Beijing East IP Ltd./Beijing East IP Law Firm for general informational purposes only and is not intended as legal advice. Nothing in this booklet is, or is intended to be, legal advice, nor intended to create an attorney-client relationship.
PREFACE
First of all, I am very glad to see the booklet China Trademark Review 2014 has come out. As far as I know, it is rare for Chinese attorneys publish a book or booklet in English regarding trademark issues, as attorneys are always tied up by various cases with strict deadlines. It could be extremely difficult and a big challenge for Chinese attorneys to compile a booklet in English, due to various reasons including the time shortage and language barriers. On the other hand, however, I firmly believe this has great significance to not only the authors and the firm, but also the whole intellectual property community.
I am also glad to see the willingness and generosity of the authors to “share” their valuable thoughts, experience and tips to all the colleagues, especially to those who only read English. I firmly believe this booklet is of great help and assistance for English speaking people to learn more about the latest intellectual property law development and practice in China.
The booklet China Trademark Review 2014 is divided into three sections.
“Typical Case Analysis” section is to comment and analyze the two typical trademark cases: The “Duck King in Chinese” Retrial Case as one of China Courts 2013 Top 10 Innovative IP Cases, and the “RITZ-CARLTON” Well-known Trademark Case Recognized by Chinese Courts. Both cases are handled by our trademark attorneys and selected by Chinese courts as important cases having guiding role for the future.
“In-depth Researches” section is the English translation of the selected six academic articles out of over 20 articles regarding trademark published on Chinese authoritative magazines and newspapers like China Trademark magazine and China Intellectual Property News, written by Mr. Jason Wang, our partner at Beijing East IP Law Firm in the last decade.
“Hot Topics and Tips” section contains seven articles regarding the hot topics in the trademark field like protection on prior copyright, trademark infringement involving OEMs, and coexistence agreement. The authors have also provided their valuable ideas and tips to handle similar matters.
I hope through our mutual contribution and efforts, study atmosphere will be created in our law firm, which is important for upgrading our attorneys’ academic level as well as enhancing the quality of our legal services for our clients.
Sincerely yours,
Dr. Lulin Gao Chairman, Beijing East IP Ltd. / Beijing East IP Law Firm Honorary President, ACPAA Vice Chairman, Internet Society of China Patent Attorney and Attorney at Law, PRC Adjunct Professor, Tsinghua University Law School Adjunct Professor, JMLS, Chicago
TABLE OF CONTENTS
TYPICAL CASE ANALYSIS
1. “Duck King in Chinese” Retrial as China Courts 2013 Top 10 Innovative IP Case, Jason WANG 1-10
2. “RITZ-CARLTON” Well-known Trademark Recognized by Chinese Courts, Jason WANG 11-22
IN-DEPTH RESEARCHES
1. Judgment on “Preemptive Registration by Unfair Means” in Article 31 of the Chinese Trademark Law, Jason WANG 23-29
2. Trademark Prosecution Case of “Duck King in Chinese”: Prior Rights Protection shall Coordinate with Maintenance of Market Order, Jason WANG 30-36
3. Comment and Analysis on Well-known Trademarks in the Internet Industry, Jason WANG 37-43
4. Conflict between Enterprise Name and Prior Trademark – Comment and Analysis on Article 58 of the Chinese Trademark Law 2013, Jason WANG 44-50
5. Restriction on Disclaimer to Part of Exclusive Right to Use the Trademark, Jason WANG 51-56 6. Starting Time of Application for Three-year Non-use Trademark Cancellation, Jason WANG 57-61
HOT TOPICS AND TIPS
1. Key Amendments of New Chinese Trademark Law 2013, Jason WANG and Yan ZHANG 52-73
2. Protection for Prior Copyright in Trademark Disputes, Jason WANG and Fei Fei BIAN 74-93
3. Admissibility of New Evidence during Trademark Administrative Trials, Yan ZHANG 94-97
4. Determination of Infringement and Use of Trademark in OEM Business, Yan ZHANG 98-102
5. Influence of the Coexistence Agreement on Registrability of Trademarks, He HUANG 103-107
6. Registrability of Trademarks Identical with or Similar to State Name and Geographical Name, Qing YU 108-115
7. Granting Cross-Class Protection where Goods / Services are Deemed Similar, Yan Fang FU 116-120
【TYPICAL CASE ANALYSIS】
“Duck King in Chinese” Retrial as China Courts 2013 Top 10 Innovative IP Case
Author: Mr. Jason WANG, partner at Beijing East IP Law Firm, trademark attorney and PRC Attorney-At-Law, Trademark Law Committee member at the Beijing Bar Association
Ⅰ. Key Issues of the Case
In April 2014, the Supreme People’s Court (SPC) announced the list for China Courts 2013 Top 10 Innovative IP Cases. These Top 10 Innovative IP Cases were selected from over one hundred thousand (100,000) decisions of nationwide courts in China rendered in 2013, which have significant and innovative contribution to application of the laws and regulations. The “Duck King in Chinese” trademark retrial case [Beijing Duck King Roast Duck Restaurant Co., Ltd. (Beijing Duck King) vs. Shanghai Huaihai Duck King Roast Duck Restaurant Co., Ltd. (Shanghai Duck King) vs. the Trademark Review and Adjudication Board (TRAB), the SPC Administrative Ruling (2012) Zhi Xing Zi No. 9] was on the list. Only two trademark cases were selected as Top 10 Innovative IP cases, both of which were trademark administrative retrials before the SPC.
The “Duck King in Chinese” case involves the following three highlights:
(1) Innovation significance in application of law: This case has established the standard of “two elements,” namely, “the knowledge standard” (knew or should have known) and “riding the goodwill standard” (with intention to free ride or invade other’s goodwill) of defining bad faith filing.
(2) Unique feature in procedure: This case has gone through all the procedures for trademark registrations prescribed by law, including protest of the Supreme People’s Procuratorate (SPP) and two retrials, especially the second retrial before the SPC after the first retrial decision.
(3) Prolonged time frame: It took more than eleven years for Shanghai Duck King to secure the trademark registration in the end from trademark filing to registration.
As a typical trademark case, the following experience, tips, and lessons may deserve much attention:
(1) Be prudent of abandoning the rights and remedies;
(2) Be proactive in preserving and fighting for the rights;
(3) Secure trademark applications / registrations before the market promotion; and
(4) Work out a creative and comprehensive strategy.
Ⅱ. Case Brief
1 1. Beijing Duck King: trademark application (2000) and rejection (2001)
In December 2000, Beijing Duck King filed a trademark application for “Duck King in Chinese” designating services of “Canteens, etc.” in Class 43. In July 2001, the trademark application was rejected by the Chinese Trademark Office (CTMO) for the lack of distinctiveness. Beijing Duck King failed to appeal for review before the Trademark Review and Adjudication Board (TRAB). According to the claim of Beijing Duck King in the later opposition against Shanghai Duck King, Beijing Duck King started to use the “Duck King in Chinese” trademark as of 1997. However, according to the Chinese Trademark Law 1993 applicable then, marks lacking distinctiveness cannot obtain registration via use and acquire secondary meaning. According to the Chinese Trademark Law 2001 which came into effect as of December 1, 2001, marks lacking distinctiveness may obtain registration via use and acquire secondary meaning. The reason why Beijing Duck King did not appeal to the TRAB may probably reflect Beijing Duck King has in fact agreed that the “Duck King in Chinese” trademark did lack distinctiveness.
2. Shanghai Duck King: trademark application (2002) and rejection appeal (2002-2005)
In January 2002, Shanghai Duck King filed the trademark application for “Duck King in Chinese” (Application No. 3083416) designating services of “Restaurant, etc.” in Class 43, which was rejected by the CTMO for the lack of distinctiveness as well. Shanghai Duck King appealed for review of the rejection before the TRAB. In 2005, the TRAB held as follows: While the “Duck King in Chinese” trademark designating services of “Restaurant, etc.” in Class 43 was descriptive to a certain extent, it did not constitute as a generic term in the service industry of this category. Besides, the “Duck King in Chinese” trademark of Shanghai Duck King had intensified the distinctiveness through the use and publicity over the past years (as of 2002), therefore the “Duck King in Chinese” trademark of Shanghai Duck King did not constitute the trademark that shall not be registered as prescribed in Item (2), Paragraph 1, Article 11 of the Chinese Trademark Law 2001. Subsequently, the “Duck King in Chinese” trademark of Shanghai Duck King is preliminarily approved for registration and published for opposition by the CTMO.
3. Shanghai Duck King: opposition (2005-2006) and opposition appeal (2006-2007)
In January 2005, Beijing Duck King filed an opposition against the “Duck King in Chinese” trademark of Shanghai Duck King, which triggered the conflict and confrontation between Beijing Duck King and Shanghai Duck King. The main arguments in the opposition raised by Beijing Duck King are as follows: Beijing Duck King has started to use the “Duck King in Chinese” trademark and trade name as of 1997. “Duck King in Chinese” is the trade name and the trademark with prior use and certain influence owned by Beijing Duck King, and the “Duck King in Chinese” trademark of Shanghai Duck King violated Article 31 of the Chinese Trademark Law 2001, and thus shall not obtain registration. In May 2006, the CTMO held that Beijing Duck King’s opposition was justified and thus the “Duck King in Chinese” trademark of Shanghai Duck King shall not be approved for registration. Then Shanghai Duck King filed the appeal before the TRAB.
In June 2007, the TRAB rendered the decision on the opposition review, and held that the “Duck King in Chinese” trademark of Shanghai Duck King was unlikely to cause confusion with Beijing Duck King’s prior trade name to the extent of damaging the interest thereof and did not constitute the “unfair means” either under Article 31 of the Chinese Trademark Law 2001. Beijing Duck King appealed to Beijing First Intermediate Court
2 and initiated the judicial review procedure.
4. Shanghai Duck King: first instance (2007) and second instance (2008)
In October 2007, Beijing First Intermediate Court, as the first instance court, held that the “Duck King in Chinese” trademark of Shanghai Duck King damaged the prior trade name right of Beijing Duck King, and the “Duck King in Chinese” trademark of Shanghai Duck King constituted preemptive registration of a prior trademark with certain influence used by another by unfair means and thus violated the good faith principle. Accordingly, the first instance decision revoked the TRAB decision and ruled that the “Duck King in Chinese” trademark of Shanghai Duck King should not be approved for registration. Shanghai Duck King appealed to Beijing High Court.
In October 2008, Beijing High Court, as the second instance court, affirmed the first instance court decision of revoking the TRAB decision.
5. Shanghai Duck King: first retrial (2008-2010)
After Beijing High Court rendered the first retrial decision, Shanghai Duck King filed a retrial request to Beijing High Court and the SPC respectively, and simultaneously petitioned to the SPP for a retrial protest.
In November 2009, Beijing High Court, as the retrial court, dismissed the retrial request of Shanghai Duck King. In January 2009, the SPP rendered a decision for the protest of retrial, and presented the protest of retrial to the SPC in July 2009. In November 2009, the SPC ordered Beijing High Court as the retrial court to hear the retrial. In December 2010, Beijing High Court (retrial tribunal), as the retrial court, rendered the retrial decision, revoking the decisions of both the first and second instance courts and reaffirming the TRAB decision on the opposition review. The retrial decision rendered by Beijing High Court is based on Rule 1 of the SPC Opinions on Issues regarding to the Trial of Administrative Cases of Trademark Granting and Determination (FA FA 〔2010〕No. 12), which prescribes as follows: “If the disputed trademark has been used for a relatively long time and enjoyed a higher market reputation among the relevant public, the courts shall precisely master the legislative spirit of the Chinese Trademark Law regarding coordinating the protection of prior trademark right and the maintenance of market order, fully respect the fact on the market that the relevant public has objectively distinguished relevant trademarks, and impose more emphasize on maintaining the well-established and stabilized order of the market.”
With respect to the retrial request filed before the SPC, the SPC issued a notice of court hearing and heard the case in December 2008. Later, as the SPP has decided to protest against the second instance court decision, this case was combined with the protest retrial in November 2009 to be held by Beijing High Court.
6. Shanghai Duck King: second retrial (2012-2013)
In December 2012, Beijing Duck King filed the retrial request before the SPC against the first retrial decision rendered by Beijing High Court. In February 2013, the SPC dismissed such retrial request. In this specific case, the SPC changed the criteria on the application of Rule 18 of the SPC Opinions on Issues regarding to the Trial of Administrative Cases of Trademark Granting and Determination (FA FA〔2010〕No. 12), which prescribes as
3 follows: “If a trademark applicant filing a preemptive registration knows or should know that the trademark is being used and has certain influence by others, then it should be determined to have used unfair means.”
7. Shanghai Duck King: cycle action (2008-2010)
As Beijing Duck King has filed new trademark applications of “DUCK KING in Chinese” (Application No. 4170888 and 4170887) in 2004, it is important for Shanghai Duck King to keep its earlier trademark application alive, for strategy purpose of blocking the registration of said new trademark applications filed by Beijing Duck King. Due to this exact reason, Shanghai Duck King initiated the cycle action, after the TRAB reissued its decision in October 2008 based on the second instance court decision. After Beijing First Intermediate Court rendered the decision again in March 2009, Shanghai Duck King appealed to Beijing High Court. After the SPP decided to present the protest to the SPC in July 2009 against the second instance court, Beijing High Court decided to stay the the case of cycle action in August 2009.
8. Shanghai Duck King: trademark registration (2011)
After Beijing High Court (retrial tribunal) as the retrial court rendered the first retrial decision in December 2011 as well as Beijing High Court (IP tribunal) rendered the decision on the case of cycle action, the TRAB reissued the decision, approving the registration of the “Duck King in Chinese” trademark of Shanghai Duck King. In 2011, the CTMO issued the trademark registration certificate.
9. Beijing Duck King: new trademark applications (2004), oppositions (2009-2011), and opposition appeals (2011-2014)
As for the new trademark applications filed in 2004 by Beijing Duck King, Shanghai Duck King filed oppositions in June 2009. In December 2011, the CTMO rendered the decisions on the oppositions, rejecting the registration thereof after Beijing High Court as the retrial court granted the trademark registration of Shanghai Duck King in October 2010. In April 2014, the TRAB rendered the decisions on opposition appeal, rejecting the registrations of Beijing Duck King on restaurant services.
Ⅲ. Key Points and Analysis
1. Innovation significance in application of law: This case has established the standard of “two elements,” namely, “the knowledge standard” (knew or should have known) and “riding the goodwill standard” (with intention to free ride or invade other’s goodwill) of defining bad faith filing.
This case involves the issue of interpreting the provision of “unfair means shall not be used to preemptively register the prior trademark with certain influence another person has used” prescribed by Article 31 of the Chinese Trademark Law 2001. In this specific case, the SPC expressly clarified that “unfair means” refers to the situation that the applicant of the later trademark knows or should have known the prior trademark, AND the trademark applicant has the bad faith of obtaining benefits from the reputation of such prior trademark. Generally, if the prior trademark has certain influence, while the applicant of later trademark knows or should have known said prior trademark, and the applicant still files the trademark application for registration, it can be presumed that such applicant has the intention to invade the goodwill of others. That is, the above two factors
4 generally overlap. However, the special circumstances such as this specific case are excluded. Namely, although the prior trademark has certain influence, while the applicant of later trademark does not have bad faith, it shall not constitute “unfair means” prescribed by Article 31 thereof.
In this specific case, the SPC established and affirmed for the first time the new standard of “Two Elements,” that is, both of the two elements of “the knowledge standard” (knew or should have known) and “riding the goodwill standard” (with intention to free ride or invade other’s goodwill) shall be cited as criteria indispensable to determine the bad faith of the trademark applicant. This is a significant supplement and improvement to Rule 18 of the SPC Opinions on Issues regarding to the Trial of Administrative Cases of Trademark Granting and Determination (FA FA〔2010〕No. 12) regarding the provision of bad faith filing prescribed under Article 31 of the Chinese Trademark Law 2001. Rule 18 of the SPC Opinions on Issues regarding to the Trial of Administrative Cases of Trademark Granting and Determination (FA FA〔2010〕No. 12) prescribes as follows: “If a trademark applicant filing a preemptive registration knows or should know that the trademark is being used and has certain influence by others, then it should be determined to have used unfair means.”
2. Unique feature in procedure: This case has gone through all the procedures for trademark registrations prescribed by law, including protest of the SPP and two retrials, especially the second retrial before the SPC after the first retrial decision.
This case has exhausted all possible legal procedures prescribed under the law. It began with all the four administrative proceedings (i.e. rejection, rejection appeal, opposition, and opposition appeal), then both the two judicial proceedings (i.e. the first instance and the second instance), and then the first retrial proceeding initiated by the SPP protest, and the second retrial before the SPC after the first retrial decision.
The case has gone through the procedures like the following: (1) Filing, rejection, and rejection appeal; (2) Opposition, opposition appeal; (3) The first instance and second instance before the courts; (4) The first retrial, and the second retrial before the SPC which is rare; (5) As for the first retrial, the case has gone through retrial request with Beijing High Court, retrial with the SPC, and retrial initiated by the SPP and the SPP has won the case in the end which is rare; and (6) Cycle action against the TRAB decision reissued.
In fact, when a person intends to figure out all the processes and procedures for the trademark registration in China, he does not have to look at the provisions prescribed by the Chinese laws. Instead, he may only need to look at the “Duck King in Chinese” case and the chart flow thereof.
3. Prolonged time frame: It took more than eleven years for Shanghai Duck King to secure the trademark registration in the end from trademark filing to registration.
The case has lasted for more than eleven years, from the application date in January 2002 to February 2013 when the SPC rendered the retrial decision. When the CTMO issued the trademark registration certificate in 2011 for the “Duck King in Chinese” trademark of Shanghai Duck King, the registration date of such trademark registration certificate is 2005, and six years has already passed.
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This is one of the most important reasons why the Chinese Trademark Law 2013 has made the following two major changes: 1) the new law has stipulated the time limitation for the examination and adjudication on opposition, rejection appeal, invalidation, etc. as 9 months, 9 plus 3 months, 12 plus 6 months; and 2) the new law has streamlined the opposition procedure, and the opposed trademark will obtain registration if the opposition grounds are dismissed.
Ⅳ. Summary and Suggestion
As a typical trademark case, the following experience, tips, and lessons may deserve much attention.
1. Be prudent of abandoning the rights and remedies
The biggest lesson for Beijing Duck King in this case is that Beijing Duck King abandoned the rights and remedies when its trademark application is rejected. This is a very common phenomenon among the trademark applicants. There are many reasons why a trademark is rejected, among which, one important reason is that the judgment on distinctiveness is very subjective, vary from examiner to examiner. It is not rare that the same trademark is granted for registration in one Class or several Classes, while the exactly identical trademark is rejected in other Class(es) due to lacking distinctiveness. And it is also not rare that the trademark application is deemed as not similar to a prior trademark in one Class or several Classes, while the same trademark application is deemed as similar to the identical prior trademark in another Class. In addition, the judgment on inherent distinctiveness may probably involve the culture factor on English words and Chinese words. However, it is undeniable that subjective judgment is an important factor as well. For instance, the “BURGER KING” trademark on restaurant services has obtained registrations in U.S. and China without encountering any rejection. However, the “Duck King in Chinese” trademark on restaurant services filed by both Beijing Duck King and Shanghai Duck King were rejected by the CTMO successively due to the same reason of lacking inherent distinctiveness. The trademark application of “Duck King in Chinese” (Application No. 3177217, Application Date: May 2002) filed by an individual (BI Dan Long) was rejected by the CTMO based on ground of lacking distinctiveness as well.
Just imagine, if Beijing Duck King had filed the appeal to the TRAB in 2001 against the CTMO rejection decision, what would be the result? There would be no objection on the conclusion that Beijing Duck King should have made a fatal mistake by abandoning the rights and remedies of appeal to TRAB after its trademark application is rejected by the CTMO.
2. Be proactive in preserving and fighting for the rights
When we look back the history of the case, we notice that Shanghai Duck King has been fighting to the very end in the trademark battle. Specifically, Shanghai Duck King has chosen to fight at every disadvantaged stage: 1) rejection appeal before the TRAB; 2) opposition appeal before the TRAB; 3) the second instance before Beijing High Court; 4) the first retrial including all the three remedies and routes available for retrial. Prior to the first retrial, Shanghai Duck King only won two battles, compared with loosing four battles. It is the exact reason why Shanghai Duck King won the battle in the very end that Shanghai Duck King has chosen to fight to preserve its rights.
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Of course, there are several advantages of being proactive in filing appeals to overcome the refusal: First, once the trademark obtains registration by overcoming the refusal, the applicant will benefit quite a lot, as it may be granted of the excusive right on the trademark. Second, the appeal may keep the rejected trademark further alive for a certain period of time, which will block the trademarks filed later by other parties. Third, the appeal may exhaust all the possibilities and find out a more accurate answer and final conclusion on the rejection or registrability, because the TRAB or court decisions, especially the second instance court decisions will usually have binding effect on the CTMO. Even if the applicant fails in the second instance court proceeding, this may still be a good reason and ground cited to prevent others from obtaining registration of the identical or similar trademarks.
3. Secure trademark applications / registrations before the market promotion
China adopts the first file system as the basic principle for trademark registration and protection. Thus, it is very crucial to secure the trademark applications / registrations first before the market campaign has been launched. Without the trademark application or registration beforehand, the company could be at huge potential risks. The typical case is the “IPAD” trademark of Apple Inc. in 2012. Apple Inc. has the very good idea and practice of trying to secure the trademark registration by purchasing them from the registrant before launching the market campaign in China. Of course, a problem occurred during the due diligence on the ownership of the trademark registration, which has caused the disputes and lawsuits in China.
In addition, foreign companies may need to file trademark application of their Chinese equivalents or Chinese names commonly referred by Chinese media beforehand, at least for defensive filing purpose. “Sony Ericsson in Chinese” and “VIAGRA in Chinese” may be two examples for lessons. In these two cases, Chinese media and public has used the term “SUO AI in Chinese” to refer to products of Sony Ericsson (SUO NI AI LI XIN in Chinese), and “WEI GE in Chinese” to refer to products of VIAGRA. However, the two foreign manufacturers failed to file the trademark applications of the above Chinese names in China in a timely and proactive manner. When the third parties files the trademark applications, the two foreign manufacturers filed the oppositions but the oppositions were dismissed, and those two trademarks were registered and owned by third parties in the end.
Sony Ericsson in Chinese (SUO NI AI LI XIN in Chinese) No specific meaning
SUO AI in Chinese Meaning: Seeking Love
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VIAGRA in Chinese (WAN AI KE in Chinese) No specific meaning
WEI GE in Chinese Meaning: Great and strong Brother
4. Work out a creative and comprehensive strategy
Under the circumstances Shanghai Duck King encounters, the applicants and attorneys may need to work out a creative and comprehensive strategy to protect the applicant’s rights and interests. In the “Duck King in Chinese” case, Shanghai Duck King as the applicant has proceeded with all the three remedies for the retrial, and has proceeded with the following unique procedures and complicated legal issues: (1) the request for the SPP protest, (2) cycle action, (3) distinctiveness issue, (4) relationship between Rule 1 and Rule 18 of the SPC Opinions on Issues regarding to the Trial of Administrative Cases of Trademark Granting and Determination, and (5) “two elements” standard of defining the bad faith filing.
All the above creative and comprehensive strategy requires in-depth researches and professional knowledge, which may be the key to the success of the applicant in the trademark disputes. Take the SPP protest for example, for many reasons, the public is not quite clear about the process for protest of retrial and retrial initiated by a protest from the SPP. In fact, according to Chinese laws, the Procuratorate does have the power to protest against the effective court decisions based on determination of facts, application of law, or statutory procedures. For a retrial request directly filed by an interested party before the retrial court, there will be two steps: As a first step, the retrial court will examine the case and then decide whether to docket the case with two possibilities: dismiss the retrial request, or docket the retrial case. Only when the case is docketed by the retrial court, the retrial is initiated as a second step, and there will be two outcomes as well: reverse the second instance court, or affirm the second instance court and dismiss the retrial request. Different from the retrial request directly presented by an interested party, the protest of retrial by the Procuratorate directly initiates the retrial proceeding. Once the Procuratorate decides to protest against the second instance court, the retrial court has to docket the case, and the retrial case moves to the second step directly.
Of course, Beijing Duck King initiated the second retrial, which is somewhat creative. In fact, in the trade name dispute between Google Information Technology (China) Co., Ltd. (Chinese affiliate of Google Inc.) and Beijing Gu Ge Technology Ltd. (a third party registered the trade name of “GOOGLE in Chinese” as “Gu Ge in Chinese” in the enterprise name) as early as in 2011, according to the usual practice and regulations regarding jurisdiction, the losing party Beijing Gu Ge Technology Ltd. may only file the retrial request before Beijing High Court and the retrial request cannot be filed to the SPC directly. However, in that case, after the retrial request was dismissed by Beijing High Court, the loosing party further filed a second retrial request before the SPC, based on the ground that its second retrial request is aiming at the first retrial decision rendered by Beijing
8 High Court, and thus the SPC should have the jurisdiction on the second retrial. Although the second retrial request was dismissed by the SPC in the end due to the issues of the merits, Beijing Gu Ge Technology Ltd. did work out a creative way to seek potential opportunity to get this case heard by the SPC in term of procedures.
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10 【TYPICAL CASE ANALYSIS】
“RITZ-CARLTON” Well-known Trademark Recognized by Chinese Courts
Author: Mr. Jason WANG, partner at Beijing East IP Law Firm, trademark attorney and PRC Attorney-At-Law, Trademark Law Committee member at the Beijing Bar Association
Ⅰ. Key Issues of the Case
As a famous luxury hotel band around the world, the “RITZ-CARLTON” trademark owned by The Ritz-Carlton Hotel Company, L. L. C. (Ritz-Carlton Hotel) was recognized by Beijing First Intermediate Court (the first instance court) in 2012. The trial court overruled the decision of the Trademark Review and Adjudication Board (TRAB), and recognized the RITZ-CARLTON trademark as a well-known trademark in China on hotel services and restaurant services. The first instance court decision was affirmed by Beijing High Court (the second instance court) in 2013. According to the statistics announced by Beijing First Intermediate Court (the sole court as the first instance court handling court appeals against the TRAB decisions), this Court only recognized well-known trademarks in around 100 cases in both the trademark infringement cases and the court appeal cases from 2001 to 2012. Based on the uncompleted statistics and researches, only a tiny part is for trademarks owned by foreigners.
In August 2013, China Intellectual Property News (the most authoritative and sole nationwide intellectual property newspaper in China, which is hosted by State Intellectual Property Office of China) reported the second instance of this case. In November 2013, the presiding judge from the second instance court for this case posted comments and analysis on China Intellectual Property News. And this case is listed as one of 43 typical trademark cases of court appeals selected out of around 3,000 court appeal cases handled by Beijing courts in 2013.
The case involves the following four key issues:
(1) Three basic rules for well-known trademark recognition: recognition based on case by case, recognition based on the party’s request, recognition based on necessity;
(2) Scope of protection for well-known trademark corresponding to fame of the trademark;
(3) Protection of Chinese equivalent for English trademark; and
(4) New evidence may be accepted by courts under certain situations.
Ⅱ. Case Brief Disputed Trademark LI SI KA ER DUN in Chinese in Class 36 (Chinese equivalent of RITZ-CARLTON)
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Cited Trademark 1 RITZ-CARLTON in Class 42
Cited Trademark 2 LI SI KA ER DUN in Chinese in Class 42 (Chinese equivalent of RITZ-CARLTON)
The Disputed Trademark “LI SI KA ER DUN in Chinese” (Chinese equivalent of RITZ-CARLTON) was applied by Chengdu Zhizhi Real Estate Development Co, Ltd. (Chengdu Zhizhi) in May 2006, and approved for registration in October 2009 in Class 36 on “Residential houses sales services; Real estate agencies; Brokerage; Guarantees, etc.”
The Cited Trademark 1 “RITZ-CARLTON” was applied by Ritz-Carlton Hotel in April 1994, and was approved for registration in Class 42 on “Hotel services, Restaurant services, including grill rooms, Snack-bars, Bars, and Tea room services.”
The Cited Trademark 2 “RITZ-CARLTON in Chinese” was applied by Ritz-Carlton Hotel in December 1997, and was approved for registration in Class 42 on “Hotel services, Restaurant services, including grill rooms, Snack-bars, Bars, and Tea room services.”
1. TRAB Decision
In March, 2010, Ritz-Carlton Hotel filed dispute cancellation against the Disputed Trademark before the TRAB. In August 2011, the TRAB sustained registration of the Disputed Trademark, and dismissed all claims of Ritz-Carlton Hotel. Specifically:
(1) The Disputed Trademark did not violate Article 10(1)(8) of the Chinese Trademark Law 2001, which prescribes as follows: The following signs shall not be used as trademarks: (8) those detrimental to socialist morals or customs, or having other detrimental influence. “Other detrimental influence” means the word, design, or other elements of the trademark have passive and negative influence to China’s politics, economics, cultural, religion, ethnicity, and other social public interests and orders. The Disputed Trademark did not constitute said elements.
(2) The Disputed Trademark did not violate Article 41(1) of the Chinese Trademark Law 2001, which prescribes as follows: “Where ……, or the registration of a trademark was acquired by fraud or any other unfair means, ……; and any other organization or individual may request the TRAB to make an adjudication to cancel such a registered trademark.” “Other unfair means” means disturbing trademark registration orders, prejudicing to public interests, unfairly occupying public resources, or obtaining unfair gains in other means. Whether Ritz-Carlton Hotel’s particular private rights were damaged by the Disputed Trademark does not constitute said
12 circumstances.
(3) The Disputed Trademark did not violate the second part of Article 31 of the Chinese Trademark Law 2001, which prescribes as follows: “preemptive registration by unfair means of a trademark with a certain reputation already used by another party” shall be prohibited. “Preemptive registration by unfair means of a trademark with a certain reputation already used by another party” is targeted at those trademarks with prior use which have established certain influence. Ritz-Carlton Hotel did not provide evidence to prove it has previously used services that are identical or similar to the Disputed Trademark’s designated services of “sales services for residential houses and real estate agencies” and established certain influence.
(4) The Disputed Trademark did not violate the first part of Article 31 of the Chinese Trademark Law 2001, which prescribes as follows: “An application for trademark registration shall not infringe upon the existing prior rights of others.” Trade name right is protected as an intangible enterprise asset, but damages to the prior right of others prescribed by Article 31 of the Chinese Trademark Law 2001 shall be premised on the likelihood of confusion. In general, consumers usually associate trade name with its business scope, real estate sales services and real estate agencies designated under the Disputed Trademark are clearly distinguished with Ritz-Carlton Hotel’s hotel management business. Thus, the Disputed Trademark is unlikely to cause confusion as to the source of services among the consumers and did not damage the trade name right of Ritz-Carlton Hotel and its affiliated companies.
(5) The Disputed Trademark did not violate Article 13(2) of the Chinese Trademark Law 2001, which prescribes as follows: “Where a trademark for registration to be used on non-identical or dissimilar goods is a copy, imitation, or translation of a well-known trademark of another party which has been registered in China, misleads the public, and may cause damage to the interests of the registrant of the well-known trademark, it shall not be registered and shall be prohibited from use.” According the TRAB’s factual findings, Ritz-Carlton Hotel conducted a series of promotions of the “LI ZI KAR ER DUN in Chinese” trademark and the “RITZ-CARLTON” trademark. Ritz-Carlton Hotel established Shanghai Portman Ritz-Carlton Hotel before the registration of the Disputed Trademark. From 2001 to 2005, Ritz-Carlton Hotel was awarded the prizes of “The Best Employers in Asia” and “The Best Employers in China” for three times. There are many reports about Ritz-Carlton Hotel, “LI SI KA ER DUN in Chinese,” and “RITZ-CARLTON” by Chinese domestic media before the registration date of the Disputed Trademark. However, under Article 14 of the Chinese Trademark Law 2001, the “LI ZI KAR ER DUN in Chinese” trademark and the “RITZ-CARLTON” trademark have not achieved the well-known status before the application date of the Disputed Trademark. Registration of the Disputed Trademark in dissimilar Class did not violate Article 13(2) of the Chinese Trademark Law 2001.
2. First Instance Court Decision
Ritz-Carlton Hotel was unsatisfied with the TRAB decision and brought an administrative litigation before Beijing First Intermediate Court. During the first instance, Ritz-Carlton Hotel supplemented relevant evidence.
In December, 2012, the first instance court decision [(2012) Yi Zhong Zhi Xing Chu Zi No. 295] supported the well-known trademark claims of Ritz-Carlton Hotel, revoked the TRAB decision, and recognized the “RITZ-CARLTON” trademark on services for restaurants and hotels in Class 42 as well-known in China.
13 (1) Facts ascertained by the Court
Note, except the Disputed Trademark, Chengdu Zhizhi also applied for “HAMPTON in Chinese,” “HOWARD JOHNSON in Chinese,” etc. The hotel brand “HAMPTON in Chinese” and “HAMPTON” is managed by one of the famous internationally known hotel groups, Hilton Hotel Company. The hotel brand “HOWARD JOHNSON in Chinese” is managed by another famous internationally known hotel groups, Cendant Groups.
During the litigation, Ritz-Carlton Hotel has provided search results and portions of full articles using keywords “LI ZI KAR ER DUN in Chinese” and “RITZ-CARLTON” from the China National Library, Shanghai Library, China Tourism News, Renmin Net, Xinhua Net, CNKI, and other media. Upon cross-examination, this Court holds that the followings can be proved with combination of Ritz-Carlton Hotel’s evidence provided during the TRAB administrative procedures and litigation proceeding:
On November 13, 1997, Shanghai Center filed the Request for Approving and Issuing the Business License of Shanghai Portman Ritz-Carlton Hotel with Shanghai Administration of Industry and Commerce Bureau.
On October 28, 1998, Shanghai Center Portman Ritz-Carlton Hotel requested to cancel the application of seal from Bank of China Shanghai Downtown Branch, which showed that all RMB accounts and USD accounts are under the name of “Shanghai Center Portman LI ZI KAR ER DUN Hotel.”
On October 10, 1998, the Shanghai Local Social Construction Levy Permit No. Jin-0007 issued by the Shanghai Price Bureau reveals that the Levy Permit unit is “Portman LI ZI KAR ER DUN Hotel.”
Issue 1, 1999 of Shanghai Statistics (magazine sponsored by the Shanghai Statistics Bureau and the Shanghai Municipal Statistics Institute) reveals that according to the statistics provided by Shanghai Statistics Bureau and Shanghai Modern Statistics Industry Development Center, Shanghai Portman Ritz-Carlton Hotel ranked No. 3 with RMB 345 million operating revenue among Top 50 Annual Operating Income Enterprise of Shanghai Hotel Industry in 1997.
Issue 9, 1999 of Shanghai Statistics reveals that according to the statistics provided by Shanghai Statistics Bureau and Shanghai Modern Statistics Industry Development Center, Shanghai Portman Ritz-Carlton Hotel ranked No. 3 again with RMB 269 million operating revenue among Top 100 Annual Operating Income of Shanghai Hotels in 1998.
On August 15, 1998, the magazine China Foreign Investment reveals that Shanghai Portman Ritz-Carlton Hotel ranked among Top 50 Foreign-invested Hotels in China of 1997 awarded by Association of Chinese Enterprises with Foreign Investment，and ranked No. 6 among Top 15 Five-star Hotels based on the statistics of relevant departments. Among Top 15 Five-star Hotels, 8 are from Beijing, 4 from Shanghai, 2 from Guangzhou, and 1 from Tianjin, which also proves that hotel industry in Shanghai takes the lead in China.
On January 1, 1999, the media report titled “Shanghai Portman Ritz-Carlton Hotel was Awarded ‘Five Star Diamond Award’ by American Academy of Hospitality Sciences” published on Shanghai Economic Yearbook reveals that Shanghai Portman LI ZI KAR ER DUN Hotel was awarded the “Five Star Diamond Award” by American Academy of Hospitality Sciences.
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The media report titled “Presidential Suite--Shanghai Portman Ritz-Carlton Hotel’s New Suite” published on Issue 1, 1999 of China New Time, which particularly introduced Shanghai Portman Ritz-Carlton Hotel’s presidential suits, and that the former U.S. President Clinton once stayed at its luxurious presidential suites when visiting Shanghai in June 1998.
In 2004 and 2005, for two consecutive years, Shanghai Portman Ritz-Carlton Hotel was awarded “Top 10 Popular Business Hotels in China” of China Hotels Golden-Pillow Award. In 2005 and 2006, Shanghai Portman Ritz-Carlton Hotel was nominated the prizes “Top Hotels in China” and “Top Resorts in China” awarded by Travel and Leisure magazine. Shanghai Portman Ritz-Carlton Hotel was awarded the prizes “The Best Employers in Asia” and “The Best Employers in China” for three times by Hewitt (a famous human resources management consulting firm).
On August 28, 2003, Beijing Youth Daily reported that “Ritz-Carlton is coming to Beijing,” and states that “if this country has a Ritz-Carlton Hotel, the U.S. president will undoubtedly choose it,” “Ritz-Carlton Hotel is usually called as a ultra five-star hotel, and some see it as the king of hotels,” “Ritz-Carlton Hotels are under Marriot International Groups, and Marriot International Groups is one of the most famous hotel management companies in the world…, which have been on the top of the world’s hotel groups with its superior business, and it has been numerously selected as the best company by world-famous business magazines and media.”
On April 28, 2004, China Business Times reported that “Guohua joint with Marriott, there is a strong giant in Beijing CBD,” and states that “if any city in the world can welcome Ritz-Carlton to its city, it means that this city has reached a certain level.”
On May 9, 2004, People’s Daily reported that “World’s top hotel lands at CBD of Beijing,” and states that “China Central Palace (Huamao Center) and the world famous multinational enterprise Marriot International Group held a signing ceremony in the People’s Great Hall.”
On May 10, 2004, China Business Journal reported that “Marriot International Group is the only hotel enterprise in the world’s top 500 enterprises,” and states that “two of the subsidiaries of Marriot International Groups, Ritz-Carlton and JW Marriot landed in Beijing at the same time, where Ritz-Carlton Hotel is known to the world with its legendary impeccable services and excellent environment. It has been selected as the first choice of stay by politicians and celebrities around the world and enjoys the fame of “Roof of the World” for its extreme luxury.
On May 21, 2004, Market Daily reported that “why the world's top hotel located in the China Central Palace (Huamao Center),” and states that “The Ritz-Carlton is one of the best top luxury chain hotels in the world.”
On April 18, 2005, Beijing Evening News reported that “ten top hotels land in Beijing,” states that “at the end of 2007, two of the world’s ultra luxury hotels – Ritz-Carlton Beijing and JW Marriot Hotel will be revealed.”
The “RITZ-CARLTON” brand owned by Ritz-Carlton Hotel ranked No. 43 among Top 100 Luxury Brand in 2005 selected by World Brand Lab, one of the world’s leading independent brand evaluation organization and marketing strategy consultancy organization.
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Moreover, before the application date of the Dispute Trademark, China’s media, e.g., Economic Observer, First Financial Daily, International Finance News, Hotel Modernization, China Real Estate News, China Advertising, China Tourism, Oriental Morning Post, Beijing Daily, Shenzhen Special Zone Daily, People’s Daily Online, and numerous newspaper, magazine, and internet media heavily reported “LI ZI KAR ER DUN in Chinese” and “RITZ-CARLTON.”
On April 21, 2008, Shanghai Second Intermediate Court held in the civil judgment [(2008) Hu Er Zhong Ming Wu (Zhi) Chu Zi No. 74] that: The Portman Ritz-Carlton Shanghai was established in 1998 and uses the “RITZ-CARLTON” trademark in managing activities. According to Ritz-Carlton Hotel’s official website, the Portman Ritz-Carlton Shanghai has become a platinum five-star hotel awarded by the China National Tour Bureau, and this award is the highest award in the travel and hotel industry in China. The Portman Ritz-Carlton Shanghai is one of the only three platinum five-star hotels in China and the only International luxury hotel awarded in Shanghai. Ritz-Carlton Financial Street Beijing and Ritz-Carlton Huamao Beijing also use the RITZ-CARLTON trademark in managing activities.
(2) Court Ruling
The key issues at dispute in this case are as follows: (1) whether registration of the Disputed Trademark violated Article 31 of the Chinese Trademark Law 2001; and (2) whether registration of the Disputed Trademark violated Article 13(2) of the Chinese Trademark Law 2001.
1) Whether registration of the Disputed Trademark violated Article 31 of the Chinese Trademark Law 2001
The prior right Ritz-Carlton Hotel claimed is its trade name right. But, the services for “Insurance; Pawn brokerage; Real estate sales services, etc. ” designated under the Disputed Trademark are not identical or similar to the hotel business that Ritz-Carlton Hotel is engaging in. Neither did Ritz-Carlton Hotel provide evidence to prove it has been using its trade name and established certain influence over services designated under the Disputed Trademark. Thus, under Article 31 of the Chinese Trademark Law 2001, the Disputed Trademark did not “infringe upon the existing prior rights of others” and damage the prior rights of Ritz-Carlton Hotel and its affiliated companies.
Moreover, Ritz-Carlton Hotel’s evidence is insufficient to prove that it has been using LI ZI KA ER DUN in Chinese as its trademark on identical or similar services of the Disputed Trademark and established certain influence. Thus, the TRAB decision that the registration and use of the Disputed Trademark did not violate Article 31 of the Chinese Trademark Law 2001 is not improper.
2) Whether registration of the Disputed Trademark violated Article 13(2) of the Chinese Trademark Law 2001
According to the facts ascertained in the case here, Marriott International, Inc. is one of the most famous hotel management companies in the world. RITZ-CARLTON hotel series is one of the important hotel brands managed by Marriott International, Inc., which enjoys very great goodwill in China and worldwide. Before the
16 application date (May 9, 2006) of the Disputed Trademark, the Cited Trademark 1 “RITZ-CARLTON” (Registration No. 1430754) has received numerous awards in China, ranked top in the industry, is widely reported by the Chinese media, enjoys very high reputation in the relevant Chinese public, and has satisfied the requirements to be recognized as a well-known trademark in China. Therefore, this Court hereby recognizes the Cited Trademark 1 on restaurant and hotel services as a well-known trademark. Based on the above, the protection of the Cited Trademark 1 corresponding to its well-known status shall be expanded accordingly.
The Disputed Trademark is a pure Chinese word trademark consists of “LI ZI KA ER DUN in Chinese.” “LI ZI KA ER DUN in Chinese” is a primary Chinese translation of the Cited Trademark 1 widely adopted by the Chinese government and various media. Ritz-Carlton Hotel had also applied to register the trademark of “LI ZI KA ER DUN in Chinese” on December 9, 1997. The Disputed Trademark is identical to “LI ZI KA ER DUN in Chinese,” which constitutes as a primary Chinese translation of the Cited Trademark 1. Thus, the Disputed Trademark constitutes as a translation of the Cited Trademark 1.
Ritz-Carlton Hotel claimed that the Cited Trademark 1 and the Cited Trademark 2 (“LI SI KA ER DUN in Chinese” with Registration No. 1253880) constitute as well-known trademarks and their scope of protection may reach the two services of “Sales service for residential houses; Real estate agencies” designated under the Disputed Trademark. This Court holds that even the services designated under the Disputed Trademark and the Cited Trademarks fall under Class 36 and 42 respectively, and the majority of their services are relatively different, but the two services of “Sales service for residential houses; Real estate agencies” designated under the Disputed Trademark and hotel services designated under the Cited Trademarks both involve the service field of real estate, which are somewhat related to each other. Meanwhile, considering that the Cited Trademark 1 has become well-known and with a relatively high well-known status, registration of the Disputed Trademark designating the two services of “Sales service for residential houses; Real estate agencies” is likely to mislead the relevant public and damage the interests of Ritz-Carlton Hotel. Therefore, the Disputed Trademark shall not be approved for registration and shall be prohibited from using on the two services of “Sales service for residential houses; Real estate agencies.” This Court hereby holds that the TRAB erred in sustaining registration for all of the Disputed Trademark’s services.
In sum, considering that this Court has recognized the Cited Trademark 1 as well-known trademark based on the parties’ evidence, and the factual basis relied on by the TRAB decision has changed, the TRAB decision that the registration of the Disputed Trademark did not violate Article 13(2) of the Chinese Trademark Law 2001 cannot be established, and the TRAB decision to sustain the registration of the Disputed Trademark on all of the services shall be revoked. This Court supports and grants Ritz-Carlton Hotel’s request to revoke the TRAB decision based on corresponding factual and legal bases. However, since the judicial holding of this case combined the new evidence provided by Ritz-Carlton Hotel during the litigation, Ritz-Carlton Hotel shall be responsible for the litigation fees (RMB 100).
3. Second Instance Court Decision
In March 2013, Chengdu Zhizhi, as the holder of the Disputed Trademark, was unsatisfied with the first instance court’s decision and appealed to Beijing High Court. In July 2013, Beijing High Court decision [(2013) Gao Xing Zhong Zi No. 927] dismissed Chengdu Zhizhi’s request for appeal, sustained the decision of Beijing First Intermediate Court, and affirmed that Ritz-Carlton Hotel’s trademark “RITZ-CARLTON” constitutes as
17 well-known in China. Beijing High Court holds as follows:
Pursuant to Article 14 of the Chinese Trademark Law 2001, the following factors should be considered when determining well-known trademarks, including the degree of fame of the trademark known by the relevant public; the length which the trademark has been in use; the length, extent, and geographic scope of any publicity of that trademark; the record of protection of the trademark; and other factors showing that the trademark is well-known. Ritz-Carlton Hotel has submitted a large number of evidence to the TRAB to prove the Cited Trademark 1 has relatively high reputation that constitutes well-known trademark during the trademark review and adjudication. However, the TRAB deems those evidence is insufficient to prove the Cited Trademark 1 has constituted a well-known trademark. For that reason, Ritz-Carlton Hotel has supplemented relevant evidence to further prove the fact that Cited Trademark 1 constitutes a well-known trademark. These newly supplemented evidence functions as strengthening the claim. It is not improper for the first instance court to accept those evidence after cross examination. This Court does not support the claim of Chengdu Zhizhi that the first instance court judgment has procedurally erred in acceptance of the supplemented evidence.
According to evidence provided by the Ritz-Carlton Hotel during the trademark review and adjudication and litigation proceedings, the Portman Ritz-Carlton Hotel has achieved good business status, been keeping a leading status in the same industry, been awarded lots of rewards, and been paid high attention by the media since its establishment in Shanghai. Before the application date of the Disputed Trademark, “Ritz-Carlton” frequently appeared on the newspapers and Internet, and, objectively, large amount of media reports extended social influence of the brand “Ritz-Carlton,” which allows it enjoy high reputation among relevant Chinese public. The first instance court properly affirmed the Cited Trademark 1 constitutes a well-known trademark based on the evidence of the case. Chengdu Zhizhi’s appeal claims lack sufficient evidence and are not supported by this Court.
The Disputed Trademark consists of “LI SI KA ER DUN in Chinese” with five Chinese characters, which are already been widely used in reports by domestic media and on the Internet. Based on above, the first instance court decision that affirms the Disputed Trademark in its entirety constitutes a translation of the Cited Trademark 1 is proper. Chengdu Zhizhi’s claims for appeal cannot be established, thus it cannot be supported. Considering the high fame of the Cited Trademarks in hotel industry through use and promotion, the first instance court properly affirmed that the designated services of “Sales service for residential houses; Real estate agencies” under the Disputed Trademark are related to its business scope and registration of the Disputed Trademark may mislead the public and damage the interests of Ritz-Carlton Hotel.
Ⅲ. Key Points and Analysis
The RITZ-CARLTON case covers the following four key issues:
1. Three basic rules for well-known trademark recognition: recognition based on a case by case situation, recognition based on the party’s request, and recognition based on necessity
According to the statistics announced by Beijing First Intermediate Court (the sole court as the first instance court handling court appeals against the TRAB decisions), this Court only recognized well-known trademarks in around 100 cases in both the trademark infringement cases and the court appeal cases from 2001 to 2012. Based
18 on the uncompleted statistics and researches, only a tiny part is for trademarks owned by foreigners. Then, are there any particular rules to recognize a trademark as well-known?
According to the practice in China, there are three basic rules for well-known trademark recognition: 1) recognition based on a case by case situation, 2) recognition based on the party’s request, and 3) recognition based on necessity. The newly added Article 14(1) of the Chinese Trademark Law 2001 amended on August 30, 2013, which has come into effect as of May 1, 2014, prescribes that the well-known status of a trademark shall be recognized based on the request of the party concerned and as a factual determination for the necessity of the trademark case. The above provision of the Chinese Trademark Law 2013 has expressly affirmed by the legislation as the rules to recognize well-known trademarks.
In this “RITZ-CARLTON” case, according to the court decisions and the presiding judge’s analysis, the hotel services and restaurant services provided by Ritz-Carlton Hotel are not identical or similar to those under the Disputed Trademark, thus the only remedy to protect Ritz-Carlton Hotel’s rights and interests is the well-known trademark argument. Therefore, the recognition of well-known trademark for “RITZ-CARLTON” is consistent with the rule of well-known trademark recognition based on necessity and other rules mentioned above.
The grounds argued by Ritz-Carlton Hotel involve Article 10(1)(8), Article 41(1), Article 31 and Article 13(2) of the Chinese Trademark Law 2001. The Court holds that the Disputed Trademark’s registration does not fall under the situations prescribed by Article 10(1)(8) and Article 41(1) of the Chinese Trademark Law 2001; the Disputed Trademark is approved for “Residential houses sales services; Real estate agencies”; and evidence submitted by Ritz-Carlton Hotel fails to prove its that certain fame has been obtained in the aforesaid scope of services, and it fails to prove that the Disputed Trademark used on the aforesaid services will cause prejudice to the trade name right of Ritz-Carlton Hotel who engages in hotel services. Based on above and the party’s request, the Court has decided to apply Article 13(2) of the Chinese Trademark Law 2001 to determine whether the Disputed Trademark should be sustained for registration, which is in conformity with the aforesaid basic principles to recognize the well-known trademark.
2. Scope of protection for well-known trademark corresponding to fame of the trademark
The courts hold that the services of “Residential houses sales services; Real estate agencies” in Class 36 designated under the Disputed Trademark shall be cancelled, while other designated services like “Brokerage; Guarantees, etc.” in Class 36 shall remain as registered.
The presiding judge’s comments and analyses are as follows: Well-known trademark protection is a stronger cross-Class protection, but it is not an all-Class protection. Even if a trademark is recognized as well-known, such stronger protection shall be entitled only within the corresponding scope. In this specific case of “RITZ-CARLTON,” the Cited Trademark designated on “Hotel services; Restaurant services, etc.” is recognized as a well-known trademark. The Court held that services of “Residential houses sales services; Real estate agencies” designated under the Disputed Trademark are related to the hotel services and restaurant services. Therefore, the Court ruled that the registration of the Disputed Trademark on “Residential houses sales services; Real estate agencies” is likely to mislead relevant public and prejudice Ritz-Carlton Hotel’s rights and interests accordingly. However, with respect to other services under the Disputed Trademark, they are not incorporated into the protection scope of well-known trademark.
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The court ruling as well as the presiding judge’s comments and analyses comply with the Chinese Trademark Law 2001. According to Article 13(2) of the Chinese Trademark Law 2001 and Article 13(3) of the Chinese Trademark Law 2013, one of the prerequisites for a registered well-known trademark seeking cross-Class protection is that it “tends to mislead the public and prejudice the interests of the well-known trademark owner.” This has been interpreted as that well-known trademark recognition will not cover all Classes of goods/services. Instead, it merely covers those goods and services in certain Classes which may “tend to mislead the public and prejudice the interests of the well-known trademark owner.”
3. Protection of Chinese equivalent for English trademark
The Courts held that a close association has been established between the trademarks “LI SI KA ER DUN in Chinese” and “RITZ-CARLTON” via Ritz-Carlton Hotel’s use and promotion. Thus, the Disputed Trademark “LI SI KA ER DUN in Chinese” is the translation of “RITZ-CARLTON.”
According to Article 13(2) of the Chinese Trademark Law 2001 and Article 13(3) of the Chinese Trademark Law 2013, “translation” of a well-known trademark is forbidden. Therefore, the key issue is to establish the close or corresponding association between an English trademark and its Chinese equivalent. In this case, the Courts held that Chinese media has adopted “LI SI KA ER DUN in Chinese” as the major translation for the “RITZ-CARLTON” trademark, and Ritz-Carlton Hotel has been using and filed the trademark application for “LI SI KA ER DUN in Chinese” as the Chinese equivalent of “RITZ-CARLTON.” Thus, “LI SI KA ER DUN in Chinese” shall be deemed as the translation of “RITZ-CARLTON.”
In fact, there have been many cases where Chinese equivalent of English trademarks has been protected in practice of China, including “LAND ROVER in Chinese,” “DELL in Chinese,” and “Sotheby’s in Chinese.”
LAND ROVER LAND ROVER in Chinese
DELL DELL in Chinese
Sotheby’s Sotheby’s in Chinese
4. New evidence may be accepted by courts under certain situations
The Courts held that new evidence subsequently submitted by Ritz-Carlton Hotel in the litigation is admissible.
20 For the practice in China, this issue is hotly debated and whether the Courts admit the new evidence varies from case to case. In this case, the court ruling and the presiding judge’s comments point out the essence and key factor to be considered.
The presiding judge comments and analyses are as follows: There are different views between the TRAB and the Court as to whether the Cited Trademark “RITZ-CARLTON” should be recognized as a well-known trademark. The direct reason for this issue is the large amount of evidence supplemented by Ritz-Carlton Hotel during the administrative litigation proceeding. Usually, the Court does not necessarily admit all the evidence subsequently supplemented by the parties merely during the litigation proceeding. In this case, however, the evidence supplemented by Ritz-Carlton Hotel is to strengthen the evidence submitted during the TRAB proceeding. It would seriously affect Ritz-Carlton Hotel’s rights and interests if the evidence is not to be admitted, especially when comprehensively considering the evidence submitted during the TRAB proceeding and litigation proceeding, the “RITZ-CARLTON” trademark may be recognized as a well-known trademark. It would probably violate the principle of fairness and justice if the supplemented evidence was not admitted.
In fact, there are some recent cases where the court has accepted the new evidence submitted by the interested party during the litigation proceeding, under certain circumstances.
Ⅳ. Summary and Suggestion
Based on the above analysis, we recommend the trademark owners take actions as follows:
1. Collect evidence to support the well-known trademark argument
In order to increase the chances of success for the well-known trademark argument, it is important for the trademark owner to collect the evidence in the following aspects:
(1) There was a time where the Chinese authorities, especially Chinese court, have been imposing very strict requirements on well-known trademark recognition. However, as the Chinese Trademark Law 2013 has banned the commercial use of “Well-known trademark” wording, the requirements on well-known trademark recognition are expected to be lowered. In April 2014, China Supreme Court announced a well-known trademark recognition case as China Courts 2013 Top 10 IP cases, in order to send a strong signal that requirements on well-known trademark recognition are expected to be lowered. Accordingly, for the foreign companies as the trademark owners, they should be much delighted about the latest trend, and get well prepared for the well-known trademark protection.
(2) While collecting evidence, the trademark owner shall focus on evidence proving the fame of the cited trademarks prior to application date of disputed trademark or opposed trademark. Of course, evidence after application date of disputed trademark or opposed trademark is not excluded to prove the fame of the cited trademarks after application date of disputed trademark or opposed trademark.
(3) Evidence proving fame of the trademark may include the various award and prize lists, magazines and newspapers, which may cover all the companies in the same industry. Thus, if a law firm has successfully obtained such evidence materials, it has in fact established a proprietary database in the specific industry. This
21 experience and proprietary database will be very helpful and attractive to the other companies in the same industry.
(4) Evidence proving the relatedness of goods/services. This is related to the scope of protection for the well-known trademark. The higher of degree of the relatedness of goods/services is, the higher of possibility of cross-Class protection for well-known trademark will be.
(5) Evidence proving the bad faith of the adversary. This is also important factor to obtain the cross-Class protection via well-known trademark recognition. The well-known trademark system is to crack down the bad faith filing and free riding on goodwill of other parties. Like some other cases where well-known trademark protection is granted, the adversary in the RITZ-CARLTON case has filed trademark applications which are suspected of taking advantage of famous trademarks owned by third parties.
2. Trademark protection by filing Chinese equivalents of English trademarks and defensive strategy
Due to the credit system and other problems, the bad faith filings may be somewhat rampant in China, and copycats can be easily found in many cases. Under these circumstances, it is important for the trademark owners outside China to take some precautions and proactive actions, in order to better protect their intellectual property rights in China at a cost effective and result effective way. First, the foreign trademark owner may need to file trademark applications for Chinese equivalents in addition to the English trademark. Second, the foreign trademark owner may need to file some defensive trademark filings on the core scope and extended scope of their business.
3. New evidence with great significance is always encouraged to be submitted in subsequent proceeding
For various reasons, it is possible and common that the trademark owners will omit some evidence in the previous proceeding, and later more evidence may be found out. For those new evidence with great significance failed to be submitted in the previous proceedings, they are recommended in the subsequent proceeding. In addition, in the next proceeding, it is important to reexamine all the evidence on hand to explore the possibility of digging out more in-depth evidence. It is also very important to recheck the status of the opposed trademark or disputed trademark as well as the status of the adversary, to see whether there are some new findings.
22 【IN-DEPTH RESEARCHES】
Judgment on “Preemptive Registration by Unfair Means” in Article 31 of the Chinese Trademark Law
Author: Mr. Jason WANG, partner at Beijing East IP Law Firm, trademark attorney and PRC Attorney-At-Law, Trademark Law Committee member at the Beijing Bar Association
* This article is the English translation for Mr. Wang’s article in Chinese published on China Trademark magazine (Issue 6, 2013) and Trademark Communications magazine (Issue 5, 2013). China Trademark magazine is sponsored by China Trademark Association under supervision of the State Administration for Industry and Commerce (SAIC) overseeing the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB). Trademark Communications magazine is the internal magazine of the CTMO.
In February 2013, the Supreme People’s Court (SPC) rendered a decision [The SPC Administrative Order (2012) Zhi Xing Zi No. 9] (the SPC No. 9 Order) on the retrial case of the trademark “Duck King in Chinese” filed by Shanghai Huai Hai Duck King Roast Duck Restaurant Co., Ltd. (previously named as Shanghai Huai Hai Quanjude Roast Duck Restaurant Co., Ltd., hereinafter as “Shanghai Duck King”). The SPC holds that the opposed mark of “Duck King in Chinese” filed by Shanghai Duck King did not constitute preemptive registration by unfair means under Article 31 of the Chinese Trademark Law 2001. Thus, retrial application filed by Beijing Duck King Roast Duck Restaurant Co., Ltd. (Beijing Duck King) shall be rejected. This is another judgment in favor of Shanghai Duck King since the first retrial decision [Beijing High Court Administrative Judgment (2010) Gao Xing Zai Zhong Zi No. 53] rendered by Beijing High Court in December 2010. This case has lasted for over ten years and has undergone multiple twists and turns and all procedures stipulated by the law including two retrials, from the trademark application filed by Shanghai Duck King in January 2002 to the SPC’s rejection decision in February 2013 on the second retrial. This case fully reflects the administrative and judicial procedures of trademark prosecution from trademark application to final registration. The SPC No. 9 Order regarding preemptive registration by unfair means will definitely provide guidance to subsequent similar cases.
Ⅰ. The SPC No. 9 Order on the second retrial
The SPC No. 9 Order holds as follows:
Article 31 of the Chinese Trademark Law 2001 is intended to crack down on preemptive registration and compensate for the possible unfair consequences resulted from the strict principle of prior registration. Under the principle of prior registration, only where the unregistered marks of prior use have certain influence, and where the applicant of latter applied mark knows or should know the prior mark AND the applicant has the bad faith of obtaining unjustified interests from goodwill of such unregistered marks, it shall be curbed by Article 31. Rule 18 of the SPC Notice on Several Issues concerning Trial of Administrative Cases involving the Granting and Determination of Trademark Rights (Fa Fa 2010, No. 12) prescribes as follows: “As long as a trademark applicant filing a preemptive registration knows or should know that the trademark is being used and has certain influence by others, it may be deemed as unfair means.” This Rule 18 of judicial opinions explains “unfair means” as “knows or should know” without further requiring the intention of free riding and the intention of
23 invading the goodwill owned by others. The reason is that, usually, if the mark of prior use has certain influence, while the applicant of latter applied mark knows or should know such mark, then it may be presumed that said applicant has the intention to invade the goodwill owned by others, namely, the two facts (“knows or should know” and “intention of invading the goodwill owned by others”) are usually coincidence.
However, taking the specific circumstances of this case into account, the SPC No. 9 Order holds that the trademark application “Duck King in Chinese” filed by Shanghai Duck King does not constitute preemptive registration by unfair means. The reasons are as follows:
(1) On December 21, 2000, Beijing Duck King filed a trademark application for “Duck King in Chinese” designating services of “Canteens, etc.” in Class 43. On July 30, 2001, the trademark application was rejected by the Chinese Trademark Office (CTMO) for lack of distinctiveness. Beijing Duck King failed to appeal for a review. Later, Shanghai Duck King applied for the opposed mark which was also rejected by the CTMO for lack of distinctiveness. Shanghai Duck King appealed for a review of the rejection and submitted evidence of the trademark use, and was subsequently approved for preliminary publication. The disapproval of Beijing Duck King’s mark is to some degree due to the difference of previous administrative procedure it went through, which also verifies that the registration of the opposed mark field by Shanghai Duck King does not fall under the scope of preemptive registration by unfair means.
(2) Shanghai Duck King’s application for the opposed mark and its business activities in Shanghai are not intended to subjectively take advantage of the goodwill of Beijing Duck King, nor deliberately associate with Beijing Duck King to cause confusion among the relevant public. Since the application of the opposed mark to date, Shanghai Duck King and its affiliates have formed its own reputation and brand influence through wide use and promotion, which is the fruit from its own diligent business operation instead of free riding on Beijing Duck King’s goodwill.
Based on the above, the SPC No. 9 Order rules as follows: The TRAB decision is affirmed that Shanghai Duck King’s trademark application shall be approved for registration as it does not fall under the scope of unfair means. The first and second instance court decisions failed to consider whether the application of the opposed mark had the bad faith of riding on the prior mark’s goodwill, thus the application of law is inappropriate. Although the first retrial judgment rendered by Beijing High Court did not address the application of law for Article 31, it took the interests of both Beijing Duck King and Shanghai Duck King into full account, therefore the first retrial judgment shall be affirmed.
Ⅱ. Factors and standards determining “preemptive registration by unfair means” prescribed by Article 31 of the Chinese Trademark Law 2001
According to the Trademark Examination Standard jointly promulgated by the CTMO and the TRAB in 2005, seven factors shall be considered in determining preemptive registration by unfair means prescribed in Article 31 of the Chinese Trademark Law 2001: (1) the applicant of the disputed mark had trading intercourse or cooperation with the user of prior mark; (2) the applicant of the disputed mark and the user of prior mark reside in the same area or their goods / services share the same distribution channels and geographic scope; (3) the applicant of the disputed trademark had a dispute with the user of prior mark and may know the prior mark; (4) the applicant of the disputed mark and the user of prior mark had internal personnel exchanges; (5) the applicant
24 of the disputed mark takes advantage of the prior mark which has certain reputation and influence to misleadingly advertise, threatens the user of prior mark to trade with said applicant, and requests the user of prior mark or others for high transfer fee, licensing fee, or other compensations; (6) the mark owned by others is of strong inherent distinctiveness; (7) other situations that may be identified as malicious. The Trademark Examination Standard takes the enumerated legislative technique, and item (7) is a catch-all provision. The abovementioned provisions have undoubtedly provided direct reference for the heavy workload of trademark examination and have achieved positive effects. Particularly, item (6) prescribing “the mark owned by others is of strong inherent distinctiveness,” is the summary based on a large amount of actual trial practice and cases. However, enumeration cannot exhaust all possibilities after all, and certain special situations will find it hard to fit in.
Rule 18 of the SPC Notice on Several Issues concerning Trial of Administrative Cases involving the Granting and Determination of Trademark Rights divides the preemptive registration by unfair means into two types (namely, the applicant of the disputed mark “knows” and the applicant “should know”), and holds that if the applicant of the disputed mark knows or should know, then it may be deemed as unfair means. Obviously, Rule 18 is the further summary and conclusion of the Trademark Examination Standard, strengthening the crack-down on preemptive registration and curbing the trademark squatting, and effectively preventing the preemptive registration by unfair means. However, this Rule 18 shall be interpreted correctly. First, the wording “may” contained in this Rule 18 is not equivalent to “shall.” In order to realize judicial justice, we can neither spare the rat to save the dishes nor throw away the apple because of the core. Likewise, we cannot throw out the baby out of bath water or block the flies out of the window along with the sunshine. Only by avoiding those mistakes, can law truly serve as the filter and realize its function of praising virtue and punishing vice. If the above Rule 18 is understood as it “shall” be deemed as unfair means only if the applicant possess the subjective mind of knows or should know, it would be too arbitrary and too absolute, because this would not exclude the situations falling beyond the scope of curbing prescribed by Article 31 of the Chinese Trademark Law 2001. Second, if “may” were equivalent to “shall,” it would be overcorrected. Even if the overcorrection were necessary, it must be put back to the right position in a timely manner after the overcorrection. Otherwise, the “overcorrection” would be a new “error”, namely, when one “error” is corrected, it has become another “error.”
The SPC No. 9 Order further clarifies the criteria and standard of “preemptive registration by unfair means” and provides in-depth explanations on the above Rule 18 of the judicial opinions. Namely, only when the applicant of the disputed mark knows or should know the prior mark AND and the applicant has the bad faith of obtaining unjustified interests from the goodwill of trademark, it shall be subject to Article 31 of the Chinese Trademark Law 2001. The reason why “unfair means” is interpreted as “knows or should know” is that “knows or should know” usually coincides with the intention of invading the goodwill owned by others. According to the SPC No. 9 Order, “knows or should know” is insufficient to constitute the criteria and standard of “unfair means.” Whether the applicant of the disputed mark intends to free ride on and to invade goodwill owned by others is the substantial standard. The reason is that in some specific situations, “knows or should know” does not necessarily mean the intention of invading the goodwill owned by others.
From the point of the dialectical materialism, people’s awareness takes a spiral, repeated forward process. Just as Judge Xiangjun KONG of the Intellectual Property Tribunal of the SPC comments: “When the legal provisions are not clear and the content needs to be gradually clarified or the law lags behind the social development, or there is legal vacancy, then the court decisions might be very experimental, tentative, or even
25 error-piloting, where exploration and innovation are required.”[1] The SPC No. 9 Order has positively complemented and perfected the SPC judicial opinions, on the basis of full understanding of the legislative’s intention of the Chinese Trademark Law and the essential spirit of these judicial opinions combined with specific situations. Specifically, the substantial significance of the SPC retrial decision are as follows: First, judgment on “preemptive registration by unfair means” shall take full account of the inherent distinctiveness of the trademark and the trademark filing histories of both interested parties; Second, judgment on “preemptive registration by unfair means” shall take full account of the objective facts that goodwill of the disputed mark is obtained by use in good faith.
III. The SPC retrial: Judgment on “preemptive registration by unfair means” shall take full account of the inherent distinctiveness of the trademark and the trademark filing histories of both interested parties
First, unregistered trademarks protected by the clause of “preemptive registration by unfair means” under Article 31 of the Chinese Trademark Law 2001 shall be the “trademarks” which can identify the source of goods and services, rather than any “signs.” Different from registered trademarks, the possibility of registration for unregistered trademarks has not been pre-examined by the relevant authorities. Consequently, before applying the “rights conflict” clause like Article 31 of the Chinese Trademark Law 2001, the “distinctiveness” regulated in Articles 9 and 11 thereof shall be examined, and shall be taken as one of the factors in determining “preemptive registration by unfair means.” If the trademark is of strong inherent distinctiveness, it will be unreasonable to claim it is a pure coincidence that the disputed trademark resembles the trademark of prior use. Based on this, it is reasonable to presume that it would be extremely difficult for the applicant of the disputed trademark to come up with such words of strong inherent distinctiveness or coined words if it were not deliberate copy. Subsequently, it may be deemed that the applicant of the disputed mark has the intention of invading the goodwill owned by others. This is fully expressed in item (6) “the mark owned by others is of strong inherent distinctiveness” of the Trademark Examination Standard.
Second, judging from the viewpoints held by the trademark examination authorities during the trademark application process of Beijing Duck King as the user of prior mark, and Shanghai Duck King as the applicant of disputed mark, there is no doubt that designated services of “Canteens, etc.” for the trademark “Duck King in Chinese” is of weak inherent distinctiveness and originality. The TRAB decision for opposition review holds that, the disputed mark “Duck King in Chinese” per se is of weak inherent distinctiveness, therefore, the possibility that Shanghai Duck King and Beijing Duck King coincidentally have the same creativity shall not be excluded, as both of them engage in industry of roast duck restaurant. The essence of this TRAB decision is that the trademark “Duck King in Chinese” is of weak inherent distinctiveness in wording, and therefore the opposed mark does not fall under the scope of “preemptive registration by unfair means.” The SPC No. 9 Order fully recognizes the accuracy of the TRAB decision for the opposition review.
Third, both of the trademark applications filed successively by Beijing Duck King and Shanghai Duck King were rejected by the CTMO for lack of “distinctiveness.” Beijing Duck King abandoned the right to appeal, while Shanghai Duck King made reckless efforts to appeal. It is fair to say, the trademark application process of the disputed parties in the “Duck King in Chinese” case is a very critical objective fact and circumstance that differs from other cases.
Regarding “knows or should know” under Rule 18 of the SPC Notice on Several Issues concerning Trial of
26 Administrative Cases involving the Granting and Determination of Trademark Rights, there are some issues. First, in regard of the mark which lacks distinctiveness or is of weak distinctiveness, even if the applicant of the disputed mark knows or should know, which one is the object of the foregoing “knows or should know”, a mark in public domain, or the user of prior mark and his mark of prior use? Second, even though the applicant of the disputed mark knows or should know, the application for the mark that lacks distinctiveness shall not necessarily be deemed as intended to invade the goodwill owned by others. Just imagine, what would be the motive and intention for an interested party to file an application of mark lacking distinctiveness and rejected several times for registration?
IV. The SPC retrial: Judgment on “preemptive registration by unfair means” shall take full account of the objective facts that goodwill of the disputed mark is obtained by use in good faith
The value of a trademark comes from use, the life of a trademark lies in use, and the essence of a trademark also lies in use. This has been widely acknowledged in theory and actual practice, and the legal basis can be found in the Chinese Trademark Law. Besides, this has been attached great attention and emphasis in the process of the third amendment of the Chinese Trademark Law. With respect to the legislative spirit of coordinating the protection of prior mark right and the maintenance of market order, the SPC has stipulated provisions in the form of judicial opinions in three consecutive years from 2009 to 2011.
Both Rule 9 of the SPC Opinions on Several Issues concerning Intellectual Property Trial Serving the General Situation under Current Economic Situations (Fa Fa 2009, No. 23) and Rule 1 of the SPC Notice on Several Issues concerning Trial of Administrative Cases involving the Granting and Determination of Trademark Rights (Fa Fa 2010, No. 12) prescribe as follows: If the disputed mark has been used for a relatively long time and enjoyed a higher market reputation among the relevant public, the courts shall precisely master the legislative spirit of the Chinese Trademark Law regarding coordinating the protection of prior mark right and the maintenance of market order, fully respect the fact on the market that the relevant public has objectively distinguished relevant marks, and impose more emphasize on maintaining the well-established and stabilized order of the market. Rule 19 of the SPC Opinions on Several Issues concerning Functions of Intellectual Property Trials on Boosting the Development of Socialism Culture and Economy (Fa Fa 2011, No. 18) prescribes that it is necessary to respect the objectively established market order to realize the inclusive development among business operators. Thus, judgment on “preemptive registration by unfair means” shall take full account of the objective facts that goodwill of the opposed mark is obtained by use in good faith.
First, in case the disputed mark is deemed as violation of the clause of “preemptive registration by unfair means” under Article 31 of the Chinese Trademark Law 2001, it will be a negative evaluation of the applicant of the disputed mark in both aspects of morality and social value. Thus, for the disputed mark with a long-term and wide-range use, the court shall strictly and cautiously apply Article 31 thereof, taking full consideration of the harmony between the legislative and social effects of its decision.
Second, it is the coordination and balance between Rule 1 and Rule 18 of the SPC Notice on Several Issues concerning Trial of Administrative Cases involving the Granting and Determination of Trademark Rights. Judge Xiangjun KONG had incisive comments and analysis for this and holds the view as follows: “Rule 1 thereof did not impose explicit requirements on the subjective intention (with bad faith or not) of the applicant of the disputed mark, which is not neglect. The intention has been considered indeed at that time. No express attitude
27 on this issue is made, because the situations in practice are complicated and it is difficult to judge whether the applicant has the bad faith or not. Under these circumstances, it may be apprehended and understood as reserving the room for flexibly handling the issue of the intention whenever it is necessary, or even as apprehended and understood no special requirements are imposed. ”[2] Therefore, it is clear that Rule 1 of the SPC Notice on Several Issues concerning Trial of Administrative Cases involving the Granting and Determination of Trademark Rights well expresses the wisdom, the logic, and the value of jurisdiction, and situations prescribed by Rule 1 are essentially an exception of Rule 18 thereof.
Based on the objective facts that goodwill of the opposed mark is obtained by use in good faith, the SPC No. 9 Order holds that Shanghai Duck King did not have the subjective intention to exploit the goodwill of Beijing Duck King. Namely, since the application for registration of the opposed mark to date, Shanghai Duck King and its affiliates have formed its own reputation and brand influence through wide use and promotion of the opposed mark, which is the fruit from its own diligent management rather than riding on Beijing Duck King’s fame.
V. Trademark awareness: Enlightenments beyond the “Duck King in Chinese” case
The trademark prosecution case of “Duck King in Chinese” has finally and truly come to the end with the SPC retrial. There are some enlightenments beyond the case which may have more research value than the legal issues of the case itself.
On the one hand, for Beijing Duck King, it is more of a lesson that it uses the trademark “Duck King in Chinese” with a prior date but fails to obtain registration so far. First, companies shall be discreet when selecting a mark and shall conduct professional analysis in advance on the possibility of registration including the inherent distinctiveness and the potential conflicting prior rights. Second, when a trademark application is rejected, the company shall not abandon its rights and chances rashly; Instead, the company shall make necessary legal analysis before deciding whether to appeal for a rejection review. Actually, the trademark awareness includes not only the awareness of application for registration but also the awareness of rejection appeal. Beijing Duck King abandoned its right of appeal, which, in some degree, was in relation to the then provisions of the Chinese Trademark Law. But it cannot be denied that Beijing Duck King’s decision of abandonment of the appeal could have been wrong. It not only deprived its opportunity for trademark registration but also led itself into a dilemma: On the one hand, Beijing Duck King had to prove the wording “Duck King in Chinese” has relatively strong inherent distinctiveness, as it claimed Shanghai Duck King had the bad faith of “preemptive registration by unfair means.” On the other hand, however, Beijing Duck King actually acknowledged the wording “Duck King in Chinese” lacks distinctiveness, as it abandoned the right to appeal after rejection. Just imagine, what would be the result if Beijing Duck King had made reckless efforts to appeal when its trademark application is rejected by the CTMO?
On the other hand, in terms of Shanghai Duck King, there are truly some successful experiences deserving attention. Shanghai Duck King underwent four administrative procedures (rejection, rejection review, opposition, and opposition review), and two judicial procedures (the first and second instances), the protest of retrial presented by the Supreme People’s Procuratorate to the SPC, and two judicial retrials by Beijing High Court and the SPC respectively. The strong trademark awareness of proactively arguing its rights on the side of Shanghai Duck King is worth learning. However, Shanghai Duck King lacks the awareness of risk prevention on trademark, which shall be reflected. Shanghai Duck King’s investment of significant amount of capital before
28 obtaining the trademark registration actually placed the company in a bad situation with huge potential legal risks. Frankly, Shanghai Duck King lacks the trademark awareness of “Trademark application comes before market promotion,” risks prevention and conflicts of rights. Theoretically speaking, Shanghai Duck King could have cultivated any other trademarks successfully with its amount of money and other resources that invested into the trademark “Duck King in Chinese.” However, the trademark “Duck King in Chinese” case has lasted for more than ten years and the uncertainty of the trademark right and potential legal risks and disputes has undoubtedly hindered the development of the company immensely.
NOTES:
[1] Xiangjun KONG, Basic Issues in Applying the Chinese Trademark Law, China Legal Publishing House (1st Edition), Sep. 2004, p. 204. [2] Ibid, p. 214.
29 【IN-DEPTH RESEARCHES】
Trademark Prosecution Case of “Duck King in Chinese”: Prior Rights Protection shall Coordinate with Maintenance of Market Order
Author: Mr. Jason WANG, partner at Beijing East IP Law Firm
* This article is the English translation for Mr. Wang’s article in Chinese published on China Trademark magazine (Issue 3, 2011). China Trademark magazine is sponsored by China Trademark Association under supervision of the State Administration for Industry and Commerce (SAIC) overseeing the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB).
Beijing High Court rendered the retrial judgment in December 2010, eventually putting an end to the trademark prosecution case of “Duck King in Chinese,” which lasted for almost ten years and has undergone multiple twists and turns. This case fully reflects the administrative and judicial procedures during the trademark prosecution process from trademark application to the final registration. Therefore, this case has critical practical significance to the ongoing third revision of the Chinese Trademark Law. The successful retrial of this case was initiated by the protest of retrial presented by the Supreme People’s Procuratorate (SPP) to the Supreme People’s Court (SPC) and has great importance to the retrial of trademark prosecution cases, even all types of intellectual property cases initiated by a protest. The retrial judgment is in conformity with the legislative spirit of the Chinese Trademark Law, properly coordinating the protection of prior right and the maintenance of market order. The author is privileged to represent the retrial of the trademark prosecution case of “Duck King in Chinese” and hereby offers some comments and analysis regarding the related issues of this case.
I. A Case Reflects Whole Picture of Trademark Prosecution Process
The trademark prosecution process of “Duck King in Chinese” began with the trademark application in January 2001 and ended until the retrial judgment rendered by Beijing High Court in December 2010. This case underwent the four administrative procedures (the rejection, rejection review, opposition, and opposition review), two judicial procedures (the first and second instances), and the judicial retrial.
1. Rejection and rejection review
In December 2000, Beijing Duck King Roast Duck Restaurant Co., Ltd. (Beijing Duck King) filed a trademark application for “Duck King in Chinese” designating services of “Canteens, etc.” in Class 43. In July 2001, the trademark application was rejected by the Chinese Trademark Office (CTMO) for the lack of distinctiveness. [1] Beijing Duck King failed to appeal for a review. In January 2001, Shanghai Huaihai Quanjude Roast Duck Restaurant Co., Ltd. (the name was later changed into Shanghai Huaihai Duck King Roast Duck Restaurant Co., Ltd., hereinafter as “Shanghai Duck King”) filed No. 3083416 trademark application for “Duck King in Chinese” designating services of “Restaurant, etc.” in Class 43, which was also rejected by the CTMO for the lack of distinctiveness.[2] Shanghai Duck King appealed for a review of the rejection, and the Trademark Review and Adjudication Board (TRAB) reviewed and held that while the trademark “Duck King in Chinese” designating services of “Restaurant, etc.” in Class 43 was descriptive to a certain extent, it did not constitute a general term in the service industry of this category. Besides, the trademark “Duck King in Chinese” of Shanghai Duck King
30 had intensified the distinctiveness through the use and publicity over the past years, therefore the Shanghai Duck King’s trademark “Duck King in Chinese” did not constitute the mark that shall not be registered as stipulated in Paragraph 1(2), Article 11 of the Chinese Trademark Law 2001.[3]
2. Opposition and opposition review
In May 2005, Beijing Duck King opposed the trademark application “Duck King in Chinese” filed by Shanghai Duck King, which triggered the conflict and confrontation between Beijing Duck King and Shanghai Duck King. In May 2006, the CTMO held that Beijing Duck King’s opposition was justified thus the trademark application of “Duck King in Chinese” filed by Shanghai Duck King shall not be approved for registration.[4] In June 2007, the TRAB rendered the decision on the opposition review, held that Shanghai Duck King’s application for the trademark “Duck King in Chinese” was unlikely to cause confusion with Beijing Duck King’s prior trade name to the extent of damaging the interest thereof and did not constitute the “unfair means” under Article 31 of the Chinese Trademark Law 2001 either.[5]
3. First Instance and Second Instance of the Court
In regard to the TRAB’s opposition review decision, Beijing Duck King appealed to Beijing First Intermediate Court and initiated the judicial review procedure. In October 2007, Beijing First Intermediate Court rendered the first instance judgment, holding that Shanghai Duck King’s filing of the trademark “Duck King in Chinese” damaged Beijing Duck King’s prior trade name right, and Shanghai Duck King’s filing of the trademark “Duck King in Chinese” constituted preemptive registration of a prior trademark with certain influence used by another in an unfair means, thus violates the good faith principle. Therefore, the first instance decision revoked the TRAB decision for opposition review and ruled that Shanghai Duck King’s application for the trademark “Duck King in Chinese” should not be approved for registration.[6] In October 2008, Beijing High Court rendered the second instance decision and affirmed the first instance’s decision of revoking the TRAB decision for opposition review, but revoked the decision of disallowing Shanghai Duck King’s application for the trademark “Duck King in Chinese,” and ordered the TRAB to re-adjudicate on whether to approve and register Shanghai Duck King’s trademark application of “Duck King in Chinese.”[7]
4. Retrial by the SPC
Shanghai Duck King filed a petition for retrial to Beijing High Court and the SPC respectively, and simultaneously petitioned to the SPP for a retrial protest. In December 2008, the SPC issued a notice of hearing the retrial petition and heard the case.[8] In November 2009, Beijing High Court rejected the retrial petition of Shanghai Duck King.[9] In January 2009, the SPP rendered a decision for the protest of retrial, and presented the protest of retrial to the SPC in July 2009.[10] In November 2009, the SPC ordered Beijing High Court to hear a retrial.[11] In December 2010, Beijing High Court rendered the retrial decision, revoking both the first and second instances’ decisions and reaffirmed the TRAB’s opposition review decision.[12]
One of the critical reasons for taking almost ten years to reach a final decision for the trademark prosecution of “Duck King in Chinese” is the case’s complicated facts and multiple debatable issues. In the meantime, the case reflects that the problems of redundant procedure and lengthy period in China’s present trademark prosecution procedure.
31
II. Successful Retrial Case Protested by the SPP
China’s judicial trial applies the system where the second instance is the final trial and the system of trial supervision. Regarding a legally effective second instance decision, a party to the case has the right to resort to a relief from trial supervision, including presenting a petition of retrial to a Court and requesting a Procuratorate to raise a protest of retrial to the Court. In comparison with the cases of first or second instance, the cases retried in accordance with the procedure of trial supervision is relatively few, retrial cases initiated by the protest of retrial presented by a Procuratorate is even much fewer. The retrial case of the trademark “Duck King in Chinese” is a retrial case initiated by the protest of retrial presented by the SPP to the SPC.
For many reasons, the public is not quite clear about the protest of retrial and retrial initiated by a protest, some may even have doubts. For example, whether the protest of retrial in only applicable in criminal litigation rather than civil or administrative litigation? Whether the protest of retrial is only applicable for judicial corruption rather than mistakes made during determination of facts, application of laws, or statutory procedures, etc.? In fact, the Procuratorates have the power to exercise legal supervision over criminal proceedings, civil proceedings and administrative proceedings in accordance with the Chinese Criminal Procedure Law, the Chinese Civil Procedure Law, and the Chinese Administrative Procedure Law. One of the important means of legal supervision is to present a protest of retrial against the second instance decision rendered by the Court in accordance with the procedure for trial supervision. As early as 2001, the SPP has formulated Rules for Handling Civil and Administrative Protest Cases by the Procuratorate in accordance with the Chinese Civil Procedure Law and the Chinese Administrative Procedure Law, specifically regulating the procedures and rules of a protest of retrial in civil and administrative proceedings. In addition, in light of Article 64 of the Chinese Administrative Procedure Law and Rule 37 of Rules for Handling Civil and Administrative Protest Cases by the Procuratorate, the conditions under which the Procuratorates have the power to present a protest of retrial are pervasive, including not only the judicial corruption acts of embezzlement, bribery, or malpractices for personal gain, or bended the law in making judgment committed by the judges, but also the conditions that there is incorrectness in the aspects of the case per se like determination of facts, application of law, or statutory procedures, etc.
The protest of retrial by the Procuratorate is different from the petition of retrial directly presented to the Court by an interested party. With respect to a case petitioned of retrial directly by an interested party, the Court does not necessarily docket the case for retrial and initiate a retrial proceeding, it may also reject the petition of retrial. However, with respect to a case protested of retrial by the Procuratorate under Rule 75 of the SPC Interpretations on Several Issues concerning Implementation of the Chinese Administrative Procedure Law, the Court “shall” docket and retry the case. In other words, different from the petition of retrial directly presented by an interested party, the protest of retrial by the Procuratorate directly facilitates the filing of a case for retrial and initiates the retrial proceeding. In regard to the decision of the trademark prosecution case, following the protest of retrial presented by the SPP to the SPC, the SPC may order Beijing High Court to conduct a retrial. Under Article 76 of the SPC Interpretations on Several Issues concerning Implementation of the Chinese Administrative Procedure Law, a new collegial panel shall be formed for the retrial of a case by the Court. Since the second instance of the trademark prosecution case is generally prosecuted by the No. 5 Civil Tribunal (Intellectual Property Tribunal) of Beijing High Court, the retrial of the trademark prosecution case shall be prosecuted by the Trial Supervision Tribunal of Beijing High Court.
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In fact, there has already been certain judicial practice with respect to the trademark prosecution case retried based on the protest of retrial presented by the Procuratorate before the trademark case of “Duck King in Chinese.” For instance, in March 2007, Beijing High Court rendered its retrial judgment of disputed cancellation case of the trademark “JIA JIA in Chinese,” affirming the decisions of the first and second instances as well as the TRAB decision not approving the registration of the disputed trademark.[13] In October 2007, Beijing High Court rendered the retrial decision of the disputed trademark cancellation case of “TAI YANG SHEN in Chinese,” affirming the decisions of the first and second instances as well as the TRAB decision that the disputed trademark shall be cancelled.[14] Of course, the number of the successfully protested cases of trademark prosecution or even the administrative dispute cases of intellectual property is still quite limited so far. In August 2008, Beijing High Court rendered the retrial decision of a patent invalidation case, revoking the decision of the second instance but affirming the decision of the first instance as well as the adjudication of invalidating the patent rendered by the Patent Re-examination Board.[15] The case is the first retrial case of patent invalidation successfully protested by the SPP. In December 2010, Beijing High Court rendered the retrial decision of the case regarding the opposition review of the trademark “Duck King in Chinese,” and revoked both the decisions of the first and second instances, while affirmed the TRAB decision for opposition review of approving the trademark for registration. The trademark prosecution of “Duck King in Chinese” is another intellectual property administrative dispute case successfully protested by the SPP following the retrial case of patent invalidation in 2008.
The retrial decision of the trademark prosecution case of “Duck King in Chinese” rendered by Beijing High Court not only further reinforces the public’s knowledge and awareness of the protest of retrial and retrial initiated by a protest, but also has great significance to the retrial of trademark prosecution cases, even all types of intellectual property cases initiated by a protest.
III. Coordination between Protection of Prior Rights and Maintenance of Market Order
The decision of the “Duck King in Chinese” trademark prosecution case considered that “Duck King in Chinese” is the trade name of Beijing Duck King, and the registration and date of use are prior to the trademark application date of Shanghai Duck King. Even through “Duck King in Chinese” bears a weak inherent distinctiveness as a trade name, “Duck King in Chinese” possesses distinctiveness and fame to some extent after the continuous operation and use by Beijing Duck King, where its prior rights and interests should be protected. On the other hand, according to the legislative spirit of the Chinese Trademark Law, and from the perspective of maintaining the operation of the enterprise and the order of market, protect the productivity of the market, where the subject trademarks have been used for an extensive period of time, have established higher market reputations and have formed relevant public groups of their own, then the protection of prior rights and maintenance of the market order shall be coordinated, respecting the market fact that the relevant public have distinguished the trademark between the relevant trademarks objectively, and focusing on maintaining the steady market order that has been formed. Shanghai Duck King applied “Duck King in Chinese” as the enterprise name to the local Administration for Industry and Commerce in September 2000, and the business has developed rather quickly since 2002, where it opened several branches in Shanghai. Shanghai Duck King launched massive advertising campaigns of their “Duck King in Chinese” trademark through newspapers, magazines, and other media that conferred considerable economic benefits and greater scale of operation. In addition, Shanghai Duck King and its affiliated enterprises were rewarded with various honors and prizes, and
33 formed corresponding consuming group. Accordingly, the relevant consuming group can distinguish between Shanghai Duck King and Beijing Duck King on food and beverage service. Therefore, it is inappropriate to cancel Shanghai Duck King’s “Duck King in Chinese” trademark now.
For the conflict and confrontation between Beijing Duck King and Shanghai Duck King, the decisions of the TRAB, the Court of first instance, and the Court of second instance were based on Article 31 of the Chinese Trademark Law 2001, the industry and the academy also hold different opinions, both engaging in hot debate and holds their own views. The non-disputable fact in the “Duck King in Chinese” trademark prosecution case is that the inherent distinctiveness of “Duck King in Chinese” is weak, however, Shanghai Duck King has established a high reputation in the market through use, and formed a corresponding consuming group. Under such circumstances, it would be truly unfair if the decision ruled that Shanghai Duck King’s “Duck King in Chinese” trademark registration shall not obtain registration. The retrial decision was based on identifying and fully considering the facts above, not limited to the specific provisions of Article 31 of the Chinese Trademark Law 2001, and properly handling the problem of coordinating protection of prior rights and the maintenance of the market order, according to legislative spirit of the Chinese Trademark Law.
According to Article 1 of the Chinese Trademark Law 2001, protecting the public interests and the interests of producers and operators is the basic guiding principle of the Chinese Trademark Law. Throughout the Chinese Trademark Law, there are two legislative intents of the law: First, protecting the interests of the relevant public, maintaining market order, preventing the relevant public from confusion about the producers of goods and the providers of services; Second, protecting the legitimate rights and interests of prior right holders, avoiding the conflicts between the latter applied trademark and prior rights. The two aforementioned complementary legislative intents reflect the natures of private and public law of the Chinese Trademark Law. Moreover, the basic function of trademark is to distinguish the source of the goods and services, and to prevent the relevant public from confusion and misidentification of producers of goods and providers of services. Therefore, the protection of the relevant public’s interests and maintenance of market order are the basic legislative intents of the Chinese Trademark Law. Obviously, properly handling the problem of coordinating the protection of prior rights and maintenance of market order reflects the legislative spirit of the Chinese Trademark Law.
The problem of coordinating the protection of prior rights and maintenance of market order is that, shall the latter applied trademark obtain distinctiveness which can be distinguished from the prior commercial signs through use? In other words, shall the latter applied trademark be registered when the latter applied trademark and prior commercial sign would not cause confusion and misidentification among the relevant public? Article 8 of the Chinese Trademark Law 2001 stipulates that any visible sign capable of distinguishing the goods of a trademark applicant from those of others may serve as a trademark for registration application. Article 9 of the Chinese Trademark Law 2001 stipulates that the trademark for registration shall be distinctive for easy identification. The aforementioned articles serve as the leading rules not only to include circumstances of distinctiveness of a prior mark in Article 11, but also cover all circumstances obtaining the distinctiveness from prior commercial signs through use. Moreover, according to the Article 11 of the Chinese Trademark Law 2001, signs lacking inherent distinctiveness may acquire secondary meaning which is different from the original meaning through use. Based on the same logic and jurisprudence, a latter applied trademark can obtain distinctiveness which can be distinguished from prior commercial signs through use.
In practice, China’s trademark examination authority have already begun to adopt the viewpoint that the latter
34 applied trademark creates its distinguishable characteristics from the prior commercial sign through use, therefore, it does not cause confusion and misidentification among the relevant public. For example, in a trademark rejection review case of the “Yunfeng Wine Industry YUNFENG and design” trademark in 2007, Beijing First Intermediate Court found that the registration of the latter applied trademark should be approved for the important reason that it enjoys a certain fame in relevant public through long-term use and the relevant public are able to identify the source of the latter applied trademark.[16] In April 2009, the SPC Opinions on Several Issues concerning Intellectual Property Trials Serving the Overall Objective under Current Economic Situation stipulates based on the summary of practical experience as follows: “Trademarks, which have been registered and used for a long time, which have established higher market fame and have had relevant public groups formed on their own, shall not be recklessly cancelled. We shall, while legally protecting the prior rights, respect the market fact that the relevant public have objectively distinguished between the relevant trademarks. We shall apprehend the legislative intent of the trademark law on coordinating the protection of prior rights and maintaining the market order, focus on maintaining the market order that has been formed and stabilized.” Hereafter, more and more trademark rights cases, including the “Duck King in Chinese” trademark prosecution case, which follows the rules stipulated in the aforementioned judicial opinions promulgated by the SPC and the legislative intent of the Chinese Trademark Law on coordinating the protection of prior rights and maintenance of the market order. For example, in the disputed cancellation case of “YI ZHENG in Chinese” trademark and the opposition review case of “FAN JI and design” trademark, Beijing First Intermediate Court found as follows: The latter applied trademark has established a high fame in the market and formed a relevant public groups through use, or the latter applied trademark has established a high reputation in the market, formed a unique corresponding relation to the relevant public. The relevant public can distinguish the latter applied trademark from the prior one. Therefore, the latter application should be approved for registration.[17] In the rejection review case of “YONG HE Soy Milk in Chinese and design” trademark, Beijing First Intermediate Court held that, generally, the latter applied trademark constitutes similar to the cited mark on similar goods should be rejected. However, where the latter applied trademark has formed a stable market order, and can be objectively distinguished from the cited mark by the relevant public, then the latter applied trademark should be approved for registration.[18]
The retrial decision of the “Duck King in Chinese” trademark prosecution case declared as follows: When judging the conflict between latter applied trademark and prior commercial signs, the objective fact, including the actual market condition and the actual perception of the relevant public, shall be respected, and both the legal rights and interests of prior right holder and the interests of the relevant public shall be taken into account; When the latter applied trademark has obtained the distinctiveness through use that can be distinguished from the prior commercial signs and the relevant public would not be confused and misled, the latter applied trademark shall be approved for registration. The retrial decision of the “Duck King in Chinese” trademark prosecution case will undoubtedly have a positive influence and play a guiding role in similar cases in the future.
NOTES:
[1] CTMO Refusal Notice (2001) Biao Shen San Bo Zi No. 1015 [2] CTMO Refusal Notice No. ZC3083416 [3] TRAB Decision (2005) Shang Ping Zi No. 0478 [4] CTMO Opposition Decision (2006) Shang Biao Yi Zi No. 00926
35 [5] TRAB Opposition Review Decision (2007) Shang Ping Zi No. 2831 [6] Beijing First Intermediate Court Administrative Judgment (2007) Yi Zhong Xing Zi No. 966 [7] Beijing High Court Administrative Judgment (2008) Gao Xing Zhong Zi No. 19 [8] The SPC Hearing Notice (2008) Xing Jian Zi No. 299 [9] Beijing High Court Notice on Rejection of Retrial Petition (2009) Gao Xing Zhong Zi No. 00169 [10] The SPP Administrative Protest (2009) Gao Jian Xing Kang No. 1 [11] The SPC Administrative Order (2009) Xing Kang Zi No. 1 [12] Beijing High Court Administrative Judgment (2010) Gao Xing Zai Zhong Zi No. 53 [13] Beijing High Court Administrative Judgment (2006) Gao Xing Kang Zhong Zi No. 474 [14] Beijing High Court Administrative Judgment (2007) Gao Xing Kang Zhong Zi No. 65 [15] Beijing High Court Administrative Judgment (2007) Gao Xing Kang Zhong Zi No. 135 [16] Beijing First Intermediate Court Administrative Judgment (2007) Zhong Xing Chu Zi No. 1619 [17] Beijing First Intermediate Court Administrative Judgment (2010) Zhi Xing Chu Zi No. 2475, Beijing First Intermediate Court Administrative Judgment (2010) Zhi Xing Chu Zi No. 1650 [18] Beijing First Intermediate Court Administrative Judgment (2010) Zhi Xing Chu Zi No. 3037
36 【IN-DEPTH RESEARCHES】
Comment and Analysis on Well-known Trademarks in the Internet Industry
Author: Mr. Jason WANG, partner at Beijing East IP Law Firm, trademark attorney and PRC Attorney-At-Law, Trademark Law Committee member at the Beijing Bar Association
* This article is the English translation for Mr. Wang’s article in Chinese published on China Trademark magazine (Issue 6, 2012) and Trademark Communications magazine (Issue 5, 2012). China Trademark magazine is sponsored by China Trademark Association under supervision of the State Administration for Industry and Commerce (SAIC) overseeing the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB). Trademark Communications magazine is the internal magazine of the CTMO.
In April 2012, the Trademark Review and Adjudication Board (TRAB) announced the latest list of well-known trademarks recognized in China, including “Sina and design, Sina, SINA NET in Chinese,” and “SOHU in Chinese.” Up to date, around ten trademarks have been recognized as well-known in the Internet industry in China. This article is to comment and analyze the well-known trademarks in the Internet industry from two aspects: (1) Goods and services under the trademarks in the Internet industry, and (2) Evidence proving the fame of the trademarks in the Internet industry.
I. Brief Introduction to Well-known Trademarks in the Internet Industry
Currently, owners of trademarks recognized as well-known in the Internet industry include not only foreign companies engaging in business globally, but also Chinese domestic companies focusing on business in China; those trademark owners include not only companies merely providing Internet services, but also companies covering both the Internet and traditional industries; the trademark disputes involved include cases before the Chinese Trademark Office (CTMO) for oppositions and administrative complaints for civil infringement, cases before the TRAB for opposition reviews and dispute cancellations as well as infringement lawsuits before the Court for civil infringement.
In April 2006, Shenzhen Luohu District Court recognized the trademarks “Penguin design” (Registration No. 1955912) and “QQ design” (Registration No. 1962825) owned by Tencent Technology (Shenzhen) Co., Ltd. as well-known for services of “Message sending; Communications by computer terminals; Telecommunications information” in Class 38 in the trademark civil infringement cases.[1] In April 2009, the CTMO recognized the trademark “QQ” owned by Tencent Technology (Shenzhen) Co., Ltd. as well-known for services of “Information transmission; Providing telecommunications and global computer network connection services; Computer terminal communication” in Class 38 in an administrative complaint for trademark civil infringement.[2] The trademarks “Penguin design” and “QQ design” were registered in November 2002 and February 2003 respectively. The trademark “QQ” (Registration No. 3508823) was registered in January 2005.
In September 2007, the CTMO recognized the trademark “GOOGLE” owned by Google Inc. as well-known for services of “Providing customized search engines for others” in Class 42 in an administrative complaint for trademark civil infringement.[3] In April 2009, the CTMO recognized the trademark “GOOGLE” as
37 well-known again for services of “Extraction and retrieval of information and data mining by means of global computer networks” in Class 42 in a trademark opposition case.[4] The trademark “GOOGLE” (Registration No. 1471705) was registered in November 2000.
In March 2008, the CTMO recognized the trademark “BAIDU in Chinese” owned by Baidu Online Network Technology (Beijing) Co., Ltd. as well-known for services of “Providing Internet search engine via computer information networks” in Class 42, and the trademark “CTRIP in Chinese and CTRIP” owned by Ctrip Computer Technology (Shanghai) Ltd. for services of “Providing tourist information via computer networks, travel arrangements” in Class 39 as well-known in an administrative complaint for trademark civil infringement.[5] The trademark “BAIDU in Chinese” (Registration No. 1579950) was registered in May 2001 and the trademark “CTRIP in Chinese and CTRIP” (Registration No. 1579950) was registered in January 2001.
In January 2010, the CTMO recognized the trademarks “YAHOO! in Chinese” and “YAHOO!” owned by Yahoo! Inc. as well-known for services of “Providing Internet search engines” in Class 42 and the trademark “51JOB in Chinese and design” owned by 51JOB Information Technology Co., Ltd. as well-known for services of “Posting employment advertising on global computer networks, newspapers, magazines; Posting personnel recruiting advertising on global computer network, newspapers, magazines” in Class 35 in a trademark opposition case.[6] The trademarks “YAHOO!” (Registration No. 1109289) and “YAHOO! in Chinese” (Registration No. 1327419) were registered in September 1997 and October 1999 respectively. From January 2010 to March 2012, the CTMO and the TRAB have recognized the trademarks “YAHOO! in Chinese” and “YAHOO!” as well-known in 26 trademark oppositions, opposition reviews, and dispute cancellations. The trademark “51JOB in Chinese and design” (Registration No. 1639711) was registered in September 2001.
In November 2011, the CTMO recognized trademarks “SHANDA in Chinese” and “SHANDA” owned by Shanghai Shanda Networking Development Co., Ltd. as well-known for services of “Providing online game” in Class 41 in an administrative complaint for trademark civil infringement.[7] The trademarks “SHANDA in Chinese” (Registration No. 3231899) and “SHANDA” (Registration No. 3231898) were registered in September 2003 respectively.
In April 2012, the TRAB recognized the trademarks “Sina and design,” “Sina,” and “SINA NET in Chinese” owned by Beijing Sina Internet Information Service Co., Ltd. as well-known for services of “Providing advertisement information via computer information network; Advertisement publicity via computer information network; Advertisement broadcast via computer information network” in Class 35 in the trademark opposition reviews and dispute cancellations. In the meanwhile, the TRAB recognized the trademark “SOHU in Chinese” owned by Beijing Sohu Internet Information Service Co., Ltd. as well-known for services of “Message sending; Computer-aided information and image transmission” in Class 38 in the trademark opposition reviews and dispute cancellations.[8] The trademarks “Sina and design” (registration No. 1459585), “Sina” (Registration No. 1463676) and “SINA NET in Chinese” (Registration No. 1463781) were registered in October 2000 respectively, and the trademark “SOHU in Chinese” (Registration No. 1445852) was registered in September 2000.
II. Items of Goods and Services under Well-known Trademarks in the Internet Industry
The trademark applications for goods and services in the Internet industry are different from traditional industry.
38 The difference mainly lies in as follows: The CTMO Classification of Similar Goods / Services (CTMO Classification) based on the Nice Agreement is lagging behind the development of the Internet industry in reality, items of goods and services under the trademarks in the Internet industry are not accurate enough, and items for goods and services under the trademarks in the Internet industry are comprehensive.
1. The CTMO Classification is lagging behind the development of the Internet industry in reality
Although items of services recognized as well-known for the trademarks “GOOGLE,” “BAIDU in Chinese,” “YAHOO! in Chinese” and “YAHOO!” were all essentially services of “Internet search engine” in Class 42, specific descriptions for items under each trademark are different from each other, and the above services recognized as well-known are somewhat different from those designated under the trademark registrations thereof. The trademark “GOOGLE” was recognized as well-known for services of “Providing customized search engines for others” and “Extraction and retrieval of information and data mining by means of global computer networks” in Class 42 in 2007 and 2009. The trademark “BAIDU in Chinese” was recognized as well-known for services of “Providing Internet search engine” in Class 42. While the trademarks “YAHOO! in Chinese” and “YAHOO!” were recognized as well-known for “Providing Internet search engines” in Class 42. In fact, the item of “Providing Internet search engine” has not been newly added in Class 42 until the CTMO Classification (2007 version), while the application dates of all the well-known trademarks above are prior to 2007. Therefore, the CTMO has made some appropriate interpretations on items of services recognized as well-known according to items of services designated under the above trademark registrations.
Moreover, many new products and services in the Internet industry cannot find corresponding descriptions for items in the CTMO Classification. For example, online hard drive storage, online album, and other Internet services are virtual storage on network provided for users for the storage of electronic data or documents; while the item of “Physical storage of electronic data or documents” in Class 39 listed in the CTMO Classification seems to be limited to physical storage. Another example, both Telecommunications Regulations and Category of Telecommunications Business enacted in as early as September 2000 have already prescribed that scope of value-added telecommunications business includes e-mail, voice mail, on-line information database storage and retrieval, electronic data exchange, data processing and online transaction processing, value-added fax, Internet access services, Internet information services, and video conferencing services, etc. However, the descriptions of partial business above failed to be adopted in a timely manner to the CTMO Classification. The CTMO Classification seems to lag behind the development of practice forever, and will never fully and timely meet the needs of practice.
For descriptions of items not listed in the CTMO Classification, Chinese domestic trademark applicants tend to select other standard descriptions listed in the CTMO Classification which are somewhat relevant as the replacement; While foreign trademark applicants tend to select descriptions of items which are more relevant and more accurate to the goods or services in actual use, although this practice usually leads to receiving one or more Notices of Correction as office actions. In order to overcome the potential adverse effects of not having appropriate items listed in the CTMO Classification, it is recommended that Internet companies try to select descriptions of items which are more relevant and more accurate to the goods or services in actual use, in addition to selecting other standard descriptions listed in the CTMO Classification which are somewhat relevant. It is also recommended that Internet companies conduct a thorough research on the technical nature and legal nature of goods and services in the Internet industry, and refer to existing trademarks in the Internet industry,
39 especially trademark applications and registrations filed by the foreign companies. In addition, Internet companies may, from time to time, consider filing new applications for the same mark, in order to cover the updated goods and services which are newly adopted by in the CTMO Classification.
2. Descriptions for goods and services under trademarks in the Internet industry are not accurate enough
Items recognized as well-known for the trademark “51JOB and design” fall under Subclass 3501 for “Advertising services.” In fact, however, Internet services corresponding to the traditional services like “Personnel recruitment; Employment agencies” in Subclass 3504 provide more accurate descriptions of the actual business. However, the above descriptions which are more accurate are not covered in the services designated under the trademark registration of “51JOB in Chinese.” It is the exact reason that the trademarks in Internet industry can hardly find the items of goods and services fully corresponding to its actual business during the trademark registration process. Accordingly, during the process of well-known trademark recognition, it can only be based on items of goods and services designated under the trademark registrations which are not accurate enough at the very beginning.
The items of services recognized as well-known for the trademarks “Sina and design,” “Sina,” and “SINA NET in Chinese” fall under Subclass 3501 for “Advertising services.” The trademark “SOHU in Chinese” was recognized as well-known for services of “Message sending; Computer-aided information and image transmission” in Class 38, which is same as “Instant messaging services” recognized for well-known for the trademarks “Penguin design,” “QQ design,” and “QQ.” However, as a general understanding, sites like Sina, Sohu, and Yahoo! fall under the scope of portal sites which provide Internet information services. It seems “Advertising services” of Subclass 3501 can hardly prescribe precisely the nature of actual business of the above portal sites. “Instant messaging services” in Class 38 can not reflect precisely the well-known services for the trademark “SOHU in Chinese” either. The services corresponding to the portal sites seem to be “Hosting computer sites (in Chinese language)” listed in the CTMO Classification (2002 version). This description was translated from the services of “Hosting computer sites” in Class 42 of the Nice Classification. However, after the CTMO Classification (2007 version) has amended the item of “Hosting computer sites” to read as “Entrusting computer sites [web sites] ,” it seems difficult to find an appropriate description in the CTMO Classification. The reason is that both the item of “Entrusting computer sites [web sites]” and another item of “Creating and maintaining web sites for others” in Class 42 share the same nature, and both emphasize on providing technical services to others, and both are descriptions of B2B (business to business), C2C (customer to customer), B2C (business to customer) and other e-commerce sites.
3. Items of goods and services under trademarks in the Internet industry are comprehensive
All of the items recognized as well-known for the above trademarks are services, but it does not mean that trademarks in the Internet industry are limited to services. Actually, some trademarks in the Internet industry cover both goods and services. For example, instant messaging business covers not only the services of “Message sending; Communications via computer terminals” and other services in Class 38, but also goods of “Computer software (recorded); Computer programs [downloadable software]” and other goods in Class 9. Network dictionary business covers “Computer software services” in Class 42, as well as goods of “Electronic dictionary” in Class 9. Electronic publication business covers services of “Providing online electronic publications (not downloadable); Publication of electronic books and journals online” in Class 41, as well as
40 goods of “Electronic publications (downloadable)” in Class 9. Online game business covers services of “Providing online game via the computer network” in Class 41, as well as goods of “Computer game programs” in Class 9.
In addition, some well-known trademarks in the Internet industry also cover multiple services in different Classes simultaneously. For example, social networking (Social Network Service, SNS) business is online social networking services, which integrate various functions like dating (“Dating services” in Class 45), chatting (“Message sending” in Class 38), information sharing (“Providing online electronic publications via the computer network” in Class 41), game (“Providing online games via the computer network” in Class 41). Another example, sites like Sina, Sohu, Yahoo!, also provide services like portal sites, e-mail, instant messaging, in addition to providing Internet search engine services in Class 42. It is not actually difficult for the portal site services to find the appropriate descriptions in the CTMO Classification. The fact is, portal services do not correspond to merely a single Class, but rather multiple Classes comprehensively. These services may include items in different Classes like “Providing entertainment information via the Internet” in Class 41, “Providing business information via the Internet” in Class 35, “Providing financial information via the Internet” in Class 36, and “Providing beauty information and/or dining information via the computer information network” in Class 42. It is the exact reason that goods and services designated under the trademarks in the Internet industry are comprehensive. Therefore, the trademark applications in the Internet industry should cover multiple key Classes of goods and services. The nature of the trademark in the Internet industry also determines that recognition of the well-known trademark in the Internet industry may probably involve more than one Class of goods and services.
III. Evidence Proving for the Fame of Trademarks in the Internet Industry
After obtaining a trademark registration in the Internet industry, which defines the boundary of trademark rights, the issues followed will include the enforcement of the trademark rights, request for well-known trademark recognition and evidence proving the fame of trademarks. The characteristic that the Internet industry differs from the traditional industry leads to the fact that evidence proving for fame of trademarks in the Internet Industry is different from that in the traditional industry.
First, there is an issue regarding emerging and rapid development in the Internet industry vs. long-term accumulation for fame of trademarks. In the traditional industry, fame of trademarks are usually formed and accumulated for a long period of time of several years or even generations. However, the Internet industry is emerging industry with short history, while the development is rapid. In the Internet industry, the situation is usually like this: Shortly after one Internet company has created a miracle and record, another Internet company will break the old record and create the new miracle. The issue is whether a trademark in the Internet industry as emerging industry may achieve the well-known status within a short period of time. On the early Internet stage particularly, investment for advertisement for the trademarks in the Internet industry was rare, and mostly relied on word of mouth. This is especially obvious during the well-known trademark recognition for trademarks of Yahoo! Inc. and Google Inc. at the early stage. According to the Trademark Examination Standard, one element required for applying Article 13 of the Chinese Trademark Law is that the cited trademark has achieved well-known status before the application date of the disputed trademark. It took five years for the trademarks “YAHOO! in Chinese” and “YAHOO!” to achieve the well-known status in September 2000, the application date of the opposed mark “YAHOO! in Chinese andYAHOO” (Application No. 1649903), since the foundation
41 of Yahoo! Inc. in March 1995. It took three years for the trademark “GOOGLE” to achieve the well-known status in January 2002, the application date of the opposed mark “GOOGLE and Bao Hu in Chinese” (Application No. 3077519), since the foundation of Google Inc. in September 1998. These trademarks were used and promoted in a short time, and it may probably be difficult for the Internet companies to provide as sufficient and complete evidence of fame as trademarks in the traditional industry. However, there is no doubt that, the above trademarks are truly well-known trademarks widely known among the general public, and have achieved the well-known status. By contrast to the traditional industry, the Internet industry develops faster and changes quicker, and trademark in the Internet industry is more vulnerable to be infringed, which provides more urgent necessity for the protection of the well-known trademark. Under these circumstances, Chinese authorities lowered the burden of proof for the trademark owners regarding the well-known trademark recognition, and recognized the above trademarks as well-known, and thus effectively and efficiently protected the well-known trademarks in the Internet industry.
Second, there is an issue regarding non-stability and easy modification of the Internet content vs. collection and preservation of electronic evidence proving the trademark use. Even if the current web pages of the Internet companies were preserved by the notary public, it can only prove the status of the web pages for the current moment when the notarization is conducted, and it is difficult to trace back to the history web pages before that. The Chinese Trademark Law, Judicial Interpretations of the Chinese Trademark Law, the Trademark Examination Standard, and other regulations mainly made references to goods and services in the traditional industry, and rarely involved the preservation and exhibition of electronic evidence, especially the evidence related to first use and specific period of trademark use on the Internet. It is really a technical and legal issue newly emerged regarding how to determine the use of trademarks on the Internet. In practice, it may be a feasible solution to retrieve historical web pages via neutral third-party websites like Internet Internet Archive (www.archive.org or www.waybackmachine.org) or tools with similar features to the function of “back in time.” In the three-year non-use cancellation case of “HUA JUN in Chinese and huajun,” the court held as follows: The web pages are persevered for Huajun web pages by searching on the famous archives website (www.waybackmachine.org) and the notarization of the real time printing, and such site preserving the achieve is the famous non government organization. Thus, it will usually be deemed as high degree of credibility. Without the contrary evidence submitted by the other party, the web pages preserved in the form of electronic archive on that site may be deemed as true and correct. Based on that, the court adjudicated that the trademarks in the Internet industry have been used in compliance with the law within the specified period of time, and shall not be deemed to be non-use in three consecutive years.[9] In Yahoo! Inc. v. Shenzhen Yahoo! Messenger Technology Co., Ltd. trademark infringement and unfair competition case, Yahoo! Inc. used the Internet Archive website with notarization as evidence as well. The court recognized the authenticity of the evidence and concluded that the evidence reflected the use of the relevant trademarks owned by Yahoo! Inc.[10] Therefore, in the process of proving the use and the fame for the trademark in the Internet industry, we may need to pay special attention to the characteristics of the Internet industry and provide the evidence innovatively.
In addition, there is the issue of the nature of cross-territory in the Internet industry vs. territory of fame for trademarks. The Internet has the nature and characteristics of cross-territory (including cross the boundary of nations), while the fame of trademarks has the nature of territory. Whether the nature of cross-territory may be recognized? How to prove the nature of cross-territory for the trademarks in the Internet industry? These issues involve not only legal issues but also technical and evidence issues. All of the similar questions need to be explored and developed through practice and theory in the future.
42
NOTES:
[1] Shenzhen Luohu District Court Civil Judgment (2006) Shen Luo Fa Min Er Chu Zi No. 816. The trademarks “Penguin design” and “QQ design” were originally registered jointly by Shenzhen Tencent Computer System Co., Ltd. and Tencent Technology (Shenzhen), and the trademarks are held solely by the latter after the assignment in 2011 [2] List of well-known trademarks published by the CTMO on April 25, 2009 [3] List of well-known trademarks published by the CTMO on September 14, 2007 [4] List of well-known trademarks published by the CTMO on April 25, 2009. In March 2008, the trademark “GOOGLE” was transferred to Google Ireland Holdings [5]List of well-known trademarks published by the CTMO on March 25, 2008 [6] List of well-known trademarks published by the CTMO on January 15, 2010 [7] List of well-known trademarks published by the CTMO on November 29, 2011 [8] List of well-known trademarks published by the TRAB on April 27, 2012 [9] Beijing First Intermediate Court Administrative Judgments (2010) No. 1597, 1598, 1599 [10] Shenzhen Intermediate Court Civil Judgment (2009) Shen Zhong Fa Min San Chu Zi No. 375
43 【IN-DEPTH RESEARCHES】
Conflict between Enterprise Name and Prior Trademark – Comment and Analysis on Article 58 of the Chinese Trademark Law 2013
Author: Mr. Jason WANG, partner at Beijing East IP Law Firm, trademark attorney and PRC Attorney-At-Law, Trademark Law Committee member at the Beijing Bar Association
* This article is the English translation for Mr. Wang’s article in Chinese published on China Trademark magazine (Issue 12, 2013). China Trademark magazine is sponsored by China Trademark Association under supervision of the State Administration for Industry and Commerce (SAIC) overseeing the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB).
The newly revised Chinese Trademark Law 2013 adopts Article 58 which prescribes as follows: “Where the registered trademark or unregistered well-known trademark of others is used as a trade name contained in the enterprise name, which is likely to mislead the public and constitutes unfair competition, it shall be adjudicated under the Chinese Anti-Unfair Competition Law.” According to the interpretations from the Legislative Affairs Commission under the Standing Committee of the Chinese National People’s Congress, this Article 58 “primarily aims to solve the conflict of rights between enterprise name and trademark under the Chinese Anti-Unfair Competition Law,” “such conflict of rights is unfair competition in nature, and this Article 58 is specifically regulated to link up with the Anti-Unfair Competition Law.”[1] The issue of rights conflict between enterprise name and prior trademark is rather complicated, and Article 58 of the Chinese Trademark Law 2013 has provided directive guidance for resolution. However, the understanding and application of the newly adopted Article 58 are subject to further discussion and research, and need to be clarified in regulatory documents like Implementing Regulations of the Chinese Trademark Law and practice.
I. How to understand “used as a trade name contained in the enterprise name?”
1. First question: Whether “used as a trade name in the enterprise name” means prominent use of a trade name?
Regarding the prominent use of a trade name, Rule 1(1) of the Supreme People’s Court (SPC) Interpretations concerning Application of Laws in Trial of Civil Dispute Cases Arising from Trademarks [Fa Shi (2002) No. 32] expressly stated that prominent use of a trade name constitutes trademark infringement. Namely, “Where the word identical or similar to a registered trademark of others is prominently used as a trade name contained in the enterprise name on the identical or similar goods, which is likely to mislead the public,” it shall constitute the situation of “causing, in other respects, prejudice to the right to exclusive use of a registered trademark of others” prescribed by Article 52(5) of the Chinese Trademark Law 2001. However, with respect to “used as a trade name contained in the enterprise name” prescribed by Article 58 of the Chinese Trademark Law 2013, it shall refer to non-prominent use of a trade name, which is entirely different from what is prescribed by the SPC Interpretations above. The new Article 58 of the Chinese Trademark Law 2013 expressly prescribes that the use of a trade name contained in the enterprise name is unfair competition, and shall be adjudicated under the Chinese Anti-Unfair Competition Law.
44 In fact, there have been many relevant precedents in judicial practice before the adoption of Article 58 in the Chinese Trademark Law 2013. For instance, the court held in the “Philips” case that, the defendant’s act of marking “Supervised by Philips International Group (Hong Kong) Limited” on the product packing boxes is not trademark infringement under the Chinese Trademark Law 2001. However, as the plaintiff’s registered trademark “Philips” enjoys a relatively high fame, the defendant’s act of marking “Supervised by Philips International Group (Hong Kong) Limited” has violated the good faith principle. Accordingly, the court ruled that the defendant’s act constitutes unfair competition under Article 4 of General Principles of the Chinese Civil Law and Article 2 of the Chinese Anti-Unfair Competition Law.[2] In the above case, the defendant does not use the trade name in a prominent way, therefore it is not trademark infringement. However, the above circumstance falls into the scope of Article 58 of the Chinese Trademark Law 2013.
2. Second question: Whether “used as a trade name contained in the enterprise name” means non-prominent use of a trade name?
With respect to the application of law in the conflict between enterprise name and prior trademark, Beijing courts have conducted the probing researches in as early as 2002. Rule 3 of Answers of Beijing High Court on Several Issues concerning Trial of Dispute Cases Arising from Conflict between Trademark and Use of Enterprise Name [Jing Gao Fa Fa (2002) No. 357] stated as follows: “In the conflict between trademark and enterprise name, the nature of infringer’s act is mainly to damage in a legitimate manner the goodwill of others, presented by causing the consumers confused regarding the source of the goods or regarding the association among different operators. Therefore, these acts are generally unfair competition, and General Principles of the Chinese Civil Law and the Chinese Anti-Unfair Competition Law shall apply. Where the word identical or similar to a registered trademark is independently or prominently used as a trade name contained in the enterprise name on the identical or similar goods, which is likely to mislead the relevant public, it shall be deemed as infringement upon the trademark registration right of others, and shall be subject to the Chinese Trademark Law 2001.”
Later, the SPC stated in the SPC Reply regarding Zhen Tai Case [(2004) Min San Ta Zi No. 10], after consulting with the State Administration for Industry and Commerce (SAIC), as follows: “Where, in violation of the good faith principle, the word identical or similar to a registered trademark of others is used as a trade name, which is likely to mislead the relevant public, it may be adjudicated in accordance with General Principles of the Chinese Civil Law and Articles 2(1) and 2(2) of the Chinese Anti-Unfair Competition Law to judge whether it constitutes unfair competition or not.” The SPC Opinions on Several Issues concerning Intellectual Property Trials Serving Overall Situation under Current Economic Situation [Fa Fa (2009) No. 23] further clarified as follows: “Where an enterprise name used in a prominent way infringes the right of a prior registered trademark, it shall be handled as trademark infringement. Where an enterprise name is used not in a prominent way, but is sufficient to cause confusion on the market and is in violation of fair competition, it shall be deemed as unfair competition.” So far, the methodology, understanding and practice have basically come into mature regarding the application of different laws in dealing with prominent use and non-prominent use of an enterprise name.
Besides, the Chinese Trademark Law 2001 does not prescribe express regulations regarding the conflict between enterprise name and prior trademark. However, Article 31 thereof regulates the conflict between trademark application and prior enterprise name, and Article 5(3) of the Chinese Anti-Unfair Competition Law regulates the conflict between enterprise name and prior enterprise name. Evidently, at the hierarchy of the Chinese
45 Trademark Law 2001 and the Chinese Anti-Unfair Competition Law, protection by law for the trademark is not on the same level as the enterprise name, and the trademark is not properly protected under the law corresponding to the degree as it deserves. Rule 53 of Implementing Regulations of the Chinese Trademark Law and Rule 13 of Provisions on Well-known Trademark Recognition and Protection provide the rules regarding the conflict between enterprise name and well-known trademark. However, the content is relatively vague, the adjudication scope is extremely narrow, and the level of legal hierarchy is not sufficiently high. Although the SPC Reply regarding Zhen Tai Case [(2004) Min San Ta Zi No. 10] has prescribed that Article 2 of the Chinese Anti-Unfair Competition Law may be applied regarding the non-prominent use of trade name contained in the enterprise name, courts in practice are still relatively conservative in applying this Article 2. For instance, Jiangsu High Court held in a specific case that the non-prominent use of a trade name contained in the enterprise name does not infringe upon the plaintiff’s right of the registered trademark. The court did not apply Article 2 of the Chinese Anti-Unfair Competition Law based on the conflict between enterprise name and prior trademark registration. Instead, the court held that the defendant’s said act infringes upon the plaintiff’s enterprise name right with prior registration.[3] Article 58 of the Chinese Trademark Law 2013 provides that the conflict between enterprise name and prior trademark shall be handled in accordance with the Chinese Anti-Unfair Competition Law, which in fact strengthens the protection of the prior trademark, and confirms, at the hierarchy of the Chinese Trademark Law 2013 and the Chinese Anti-Unfair Competition Law, the degree of legal protection for the prior trademark in the conflict between enterprise name and prior trademark.
3. Third question: Whether “used as a trade name contained in the enterprise name” covers the registration of enterprise name?
Initially, Rule 39 of Implementing Measures for Administration of Enterprise Name Registration and Rule 2 of the SAIC Opinions of on Solving Several Issues Arising from Trademark and Enterprise Name [Gong Shang Biao Zi (1999) No. 81] prescribed principle regulations on the “acquisition” of enterprise name in addition to the “use” thereof, namely, the good faith principle shall be abided by and one shall not take advantage of the fame of other’s trademark to conduct unfair competition. Subsequently, Rule 53 of Implementing Regulations of the Chinese Trademark Law and Article 13 of Provisions on Well-known Trademark Recognition and Protection, prescribed the specific provisions, but said specific provisions merely explicitly regulate the registration of enterprise name by using other’s well-known trademark. In practice, the registration of enterprise name is closely related to non-prominent use of a trade name in the enterprise name, and the above two situations usually occur simultaneously. The “use of a trade name contained in the enterprise name” under Article 58 of the Chinese Trademark Law 2013 shall be interpreted broadly as to cover both the non-prominent use of a trade name contained in the enterprise name and the registration of enterprise name.
Of course, with respect to the non-prominent use of a trade name contained in the enterprise name, regardless of the location for the registration of enterprise name, as long as the use of enterprise name occurs within territory of China, the Chinese enforcement agencies shall have jurisdiction. However, for the registration of enterprise name by using prior mark owned by others, only when the registration of enterprise name occurs within territory of China, will Chinese enforcement agencies have jurisdiction. Regarding the registration of enterprise name occurring outside the territory of China, Chinese enforcement agencies should have no jurisdiction. In addition, where the registration of enterprise name occurs within territory of China, Chinese enforcement agencies may order such enterprise to change the registration of its enterprise name. However, how to execute more effectively judgments and decisions rendered by Chinese enforcement agencies regarding changing the
46 registration of enterprise name? Whether the regulation on revocation of the registration of enterprise name and agencies with revocation authority under Rule 53 of Implementing Regulations of the Chinese Trademark Law may be reserved, and how to change such registration of enterprise name? How to regulate the registration of enterprise name more effectively? These questions still need further detailed analysis and discussion.
Ⅱ. How to understand “registered trademark or unregistered well-known trademark of others?”
1. First question: Whether “registered trademark” in “registered trademark or unregistered well-known trademark of others” covers the registered well-known trademark? Whether Article 58 of the Chinese Trademark Law 2013 covers the conflict between enterprise name and registered well-known trademark?
No matter judging from the existing legal regulations, or judging from process of the third amendment to the Chinese Trademark Law, or judging from jurisprudential analysis, the “registered trademark” in the “registered trademark or unregistered well-known trademark of others” shall cover the registered well-known trademark.
First, Rule 53 of Implementing Regulations of the Chinese Trademark Law, Rule 13 of Provisions on Well-known Trademark Recognition and Protection, and Rule 10 of the SPC Interpretations concerning Application of Laws in Trial of Civil Dispute Cases involving Well-known Trademark Protection [Fa Shi (2009) No. 3], and Rule 3 of the SPC Reply regarding Zhang Xiao Quan Case [(2003) Min San Ta Zi No. 1] have clearly covered the conflict between enterprise name and well-known trademark. Generally speaking, legislation is the summary and inheritance of legal documents of a relatively low hierarchy and the practice experience, rather than a sudden change out of nowhere or abrupt castle in the air. On the one hand, according to the legislation background and intention as well as the literal interpretation, Rule 53 of Implementing Regulations of the Chinese Trademark Law and Rule 13 of Provisions on Well-known Trademark Recognition and Protection can be comprehended as only regulating the registered well-known trademark, excluding (at least not explicitly including) the unregistered well-known trademark. Article 58 of the Chinese Trademark Law 2013 actually expands the protection scope to explicitly cover the unregistered well-known trademark in addition to the registered well-known trademark. On the other hand, for the registered trademark without well-known status, the Chinese Trademark Law 2001 and Implementing Regulations of the Chinese Trademark Law only provided that those trademarks may prohibit others from using relevant signs on the identical or similar goods or services. However, the above laws and regulations do not prescribe clearly whether those trademarks may prohibit the non-prominent use of a trade name contained in the enterprise name or the registration of enterprise name. For the registered well-known trademark, the Chinese Trademark Law 2001 provided those trademarks may prohibit others from using relevant signs on dissimilar goods or services, and Implementing Regulations of the Chinese Trademark Law provided those trademarks may prohibit others from using the enterprise name. Article 58 of the Chinese Trademark Law 2013 provides that registered trademark without well-known status may prohibit others from using the enterprise name, which has extended the protection scope based on the past practice experience. If “registered trademark” did not cover the registered well-known trademark, then it would lead to a situation where the extent of protection for the registered well-known trademark is even lower than the unregistered trademark or unregistered well-known trademark.
Second, viewing from the legislative process of the third amendment to the Chinese Trademark Law, Article 124 of the Chinese Trademark Law (2010 Draft for Examination) provided by the Chinese Trademark Office (CTMO) and Article 62 of the Chinese Trademark Law (2011 Draft for Comments) provided by the Legislative
47 Affairs Office of Chinese State Council both referred to the well-known trademark. Article 57 of the Chinese Trademark Law (2012 Draft for Comments) provided by the Legislative Affairs Commission under the Standing Committee of the Chinese National People’s Congress prescribed the term as “well-known trademark, registered trademark.” Since the concepts of “registered trademark” and “well-known trademark” are not in the same category or level, Article 58 of the Chinese Trademark Law 2013 modifies “well-known trademark, registered trademark” to read as “registered trademark, unregistered well-known trademark.” “Well-known trademark” includes the unregistered well-known trademark and the registered well-known trademark, and “registered trademark” includes the registered trademark without well-known status and the registered well-known trademark. Thus, the integrated wording of “registered trademark, unregistered well-known trademark” is more logical.
2. Second question: Whether the conflict between enterprise name and registered well-known trademark involves cross Class protection? Shall the term “misleading the public” in Article 58 and Article 13(3) of the Chinese Trademark Law 2013 [Article 13(2) of the Chinese Trademark Law 2001] be interpreted in the same way? How to interpret such term?
First, Rule 53 of Implementing Regulations of the Chinese Trademark Law, Rule 13 of Provisions on Well-known Trademark Recognition and Protection, the Chinese Trademark Law (2010 Draft for Examination) provided by the CTMO and the Chinese Trademark Law (2011 Draft for Comments) provided by the Legislative Affairs Office of Chinese State Council stipulated the terms as “well-known trademark” and “may deceiving or misleading the public.” The Chinese Trademark Law (2012 Draft for Comments) provided by the Legislative Affairs Commission under the Standing Committee of the Chinese National People’s Congress and Article 58 of the Chinese Trademark Law 2013 stipulated the terms as “well-known trademark, registered trademark” / “registered trademark, unregistered well-known trademark” and “misleading the public.” That is, the Chinese Trademark Law 2013 continues to adopt the criteria of “misleading the public” after extending the protection scope from the registered well-known trademark to the registered trademark without well-known status and the unregistered well-known trademark. Then, whether the “confusion” element (confusion standard) applied for the registered trademark without well-known status and the unregistered well-known trademark is corresponding to the “misleading the public” element (association standard and dilution standard) prescribed under Article 13(3) of the Chinese Trademark Law 2013? Where the identical term appears in the same law, should such term be interpreted in the same way? What kind of unified interpretations may harmonize and coordinate the different standards applied to different types of above trademarks?
Second, Rule 3 of the SPC Reply regarding Zhang Xiao Quan Case prescribed as follows: “Where use of the word identical to the well-known trademark of others with prior registration as the enterprise name or part of the enterprise name, and where the industry (or feature of business operation) of that enterprise is identical to or closely related to the goods or services designated under the registered trademark of others, which may objectively dilute the well-known trademark and damage the legitimate rights and interests of the trademark registrant, the court shall order to cease such act based on the request of the interested party.” The SPC Reply deals specifically with circumstances that the industry (or feature of business operation) is “identical to” or “closely related to” goods or services designated under the registered trademark, in the meanwhile, the SPC Reply puts forward with the dilution standard. It may probably be interpreted and comprehended as follows: The understanding of the legislators and the SPC regarding the protection scope of the registered well-known trademark at that time is so-called “Sole Cross,” namely, the protection crosses the different Classes of goods or
48 services (cross Class protection to dissimilar goods or services), “or” (rather than “and”), the protection crosses the different types of commercial signs (extending from the trademark to the enterprise name). As the understanding deepens, Rule 10 of the SPC Interpretations concerning Application of Laws in Trial of Civil Dispute Cases involving Well-known Trademark Protection explicitly expands the protection scope to “dissimilar” goods and services, namely, the plaintiff may request to prohibit the defendant from using the enterprise name identical or similar to the plaintiff’s registered well-known trademark on dissimilar goods or services. The above interpretations have expanded the protection scope of the registered well-known trademark to so-called “Dual Crosses” (namely, prohibition scope for commercial signs is expanded from trademark to enterprise name, in the meanwhile, prohibition scope for Classes is expanded to dissimilar goods and services). Lastly, in judicial practice, there are also some precedents regarding the well-known trademark against the enterprise name by crossing Classes of goods and services (namely, “Dual Crosses”), such as “HONEYWELL,” “ZHONG XIN in Chinese,” “SWAROVSKI in Chinese,” and “BMW,” etc. [4]
This theory of “Sole Cross” and “Dual Crosses” may probably explain the term of “misleading the public” appearing in different provisions of the Chinese Trademark Law 2013. Article 13(3) of the Chinese Trademark Law 2013 prescribes one type of “Sole Cross” (crossing the Classes of goods and services), and the association standard and the dilution standard will apply. While Rule 53 of Implementing Regulations of the Chinese Trademark Law prescribes the other type of “Sole Cross” (crossing commercial signs), and the association standard and the dilution standard will also apply. For the registered well-known trademark against the enterprise name of others, the “Dual Crosses” standard (crossing the commercial signs as well as crossing the Classes of goods and services) is prescribed, and the association standard and the dilution standard will apply as well. Therefore, no matter crossing the Classes of goods and services or crossing the commercial signs, the criteria of “misleading the public” (the association standard and the dilution standard) shall apply.
3. Third question: Is the conflict between enterprise name and registered well-known trademark subject to the Chinese Anti-Unfair Competition Law or the Chinese Trademark Law? Or both of them shall apply simultaneously?
This question concerns not only the registered well-known trademark, but also the registered trademark without well-known status and unregistered well-known trademark. As Implementing Regulations of the Chinese Trademark Law as well as the SPC Replies and the SPC interpretations promulgated before the Chinese Trademark Law 2013 have already provided some regulations on the conflict of enterprise name and registered well-known trademark, those regulations shall be lined up with Article 58 of the Chinese Trademark Law 2013 or make some adjustments accordingly. Therefore, the author hereby discusses the application of Article 58 of the Chinese Trademark Law 2013, by taking the conflict between enterprise name and registered well-known trademark as an example only.
Rule 2(2) of the SPC Interpretations concerning Application of Laws in Trial of Civil Dispute Cases involving Well-known Trademark Protection prescribes that the interested party may bring the lawsuit regarding infringement upon trademark registration or unfair competition lawsuit, on the ground that the enterprise name is identical or similar to its registered well-known trademark. The application of law also varies in judicial practice. For example, the “HONEYWELL” case and the “ZHONG XIN in Chinese” case applied the Chinese Trademark Law 2001, while the “SWAROVSKI in Chinese” case applied both the Chinese Anti-Unfair Competition Law and the Chinese Trademark Law 2001. In the “HONEYWELL” case, the Court held as
49 follows: The defendant’s failure to observe the good faith principle or recognized business ethics when translating its enterprise name “KING POWER” into English as “HONEYWELL,” which shows obvious fault, constitutes unfair competition. In light of Article 53 of Implementing Regulations of the Chinese Trademark Law which prescribes that the registration of enterprise name by using the well-known trademark of others is infringement upon the right of registered trademark thereof, as the plaintiff’s trademark “HONEYWELL” is recognized as well-known in this case, the use of “HONEYWELL” in the defendant’s English enterprise name is also in violation of the right of registered trademark owned by others. And the court held that it is not necessary to cite the good faith principle in the Chinese Anti-Unfair Competition Law as the general law when specific laws and regulations like the Chinese Trademark Law could directly regulate the defendant’s above act. Article 58 of the Chinese Trademark Law 2013 has expressly prescribed that circumstances similar to the aforementioned will be adjudicated under the Chinese Anti-Unfair Competition Law. Therefore, upon effectiveness of the Chinese Trademark Law 2013, circumstances similar to the aforementioned shall be subject to Article 2 of the Chinese Anti-Unfair Competition Law. However, this shall not hamper the citation of Article 58 of the Chinese Trademark Law 2013, and thus to reflect the association with the Chinese Anti-Unfair Competition Law.
NOTES:
[1] Interpretations of the Chinese Trademark Law 2013 (1st Edition), Standing Committee of the Chinese National People’s Congress (Eds.), Legal Publishing House, Oct. 2013, pp. 111-112 [2] Beijing First Intermediate Court Civil Judgment (2005) Yi Zhong Min Chu Zi No. 11119 [3] Jiangsu High Court Civil Judgment (2004) Su Min San Zhong Zi No. 059 [4] Jiangsu Province Wuxi Intermediate Court Civil Judgment (2004) Xi Chu Zi No. 61, Shenyang Intermediate Court Civil Judgment (2005) Shen Zhong Min Si Chu Zi No. 70, Tianjin High Court Civil Judgment (2006) Jin Gao Min San Zhong Zi No. 21, Beijing Second Intermediate Court Civil Judgment (2008) Er Zhong Min Chu Zi No. 10067, Hunan High Court Civil Judgment (2009) Xiang Gao Fa Min San Chu Zi No. 1
50 【IN-DEPTH RESEARCHES】
Restriction on Disclaimer to Part of Exclusive Right to Use the Trademark
Author: Mr. Jason WANG, partner at Beijing East IP Law Firm, trademark attorney and PRC Attorney-At-Law, Trademark Law Committee member at the Beijing Bar Association
*This article is the English translation for Mr. WANG’s article in Chinese published on China Trademark magazine (Issue 1, 2011). China Trademark magazine is sponsored by China Trademark Association under supervision of the State Administration for Industry and Commerce (SAIC) overseeing the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB).
The earliest Chinese regulations with regard to “examination on the disclaimer to the exclusive right to use the trademark” appeared in Trademark Examination Rules, which was promulgated by the Chinese Trademark Office (CTMO) in 1994. Rules 3 and 4 of the CTMO Notice on Issues concerning Trademark Examination Notification [Shang Biao (2000) No. 80] further stipulated the specific circumstances where the exclusive right to use the trademark should be disclaimed. However, as the Implementing Regulations 2002 of the Chinese Trademark Law deleted the provisions regarding Trademark Examination Notification prescribed in previous Implementing Rules of the Chinese Trademark Law, the specific superordinate legal ground for the system of Trademark Examination Notification was thus deprived, and correspondingly Rules 3 and 4 of Shang Biao (2000) No. 80 were no longer implemented in practice. According to the current practice, during the process of trademark application for registration before the CTMO, the applicant may, or may not, disclaim the exclusive right to use certain part of the subject trademark.
Besides, Article 11 of the Chinese Trademark Law 2001 prescribes that signs which only consist of signs lacking distinctiveness shall not be registered as trademarks. However, this provision does not exclude such signs from registration as parts of the trademarks. According to Rule 49 of Implementing Regulations 2002 of the Chinese Trademark Law, for the generic name, shape or model of the goods, or those directly indicating the quality, main raw material, function, use, weight, quantity and other features of the goods contained in a registered trademark, the trademark registrant shall have no right to prohibit others from fair use. Notwithstanding the foregoing provisions in the Chinese Trademark Law 2001 and Implementing Regulations 2002 of the Chinese Trademark Law do not explicitly prescribe the disclaimer to part of the exclusive right to use the trademark, those provisions have laid a legal foundation for the circumstances to disclaim part of the exclusive right to use the trademark. According to the current practice, the part of which the exclusive right to use can be disclaimed is generally the signs prohibited from registration as trademarks for lacking distinctiveness as stipulated in Article 11 of the Chinese Trademark Law 2001. To some extent, disclaiming part of the exclusive right to use the trademark is to abandon the exclusive right to use on certain part of the signs, in exchange for the approval of registration for the trademark as a whole, which excludes said part of the signs from the protection scope of the overall trademark. However, there are restrictions on disclaimer to part of the exclusive right to use the trademark, and not all trademarks may obtain registration as a whole by disclaiming the exclusive right to use part of the signs. For instance, whether a trademark may obtain registration by disclaiming part of the exclusive right to use signs prohibited from use as trademarks? Whether a trademark may obtain registration by disclaiming part of the exclusive right to use signs conflicting with other’s prior right? This article intends to comment and analyze such issues regarding restrictions on disclaimer to part of the
51 exclusive right to use the trademark based on relevant cases in practice.
I. Whether a trademark may obtain registration by disclaiming part of exclusive right to use signs prohibited from use as trademarks?
In the rejection appeal case of trademark “Johnson’s baby Johnson and Johnson CLINICALLY PROVEN MILDNESS and Design,” under which the goods of “Skin care powder; etc.” in Class 3 are designated, the applicant disclaimed the exclusive right to use the words of “CLINICALLY PROVEN MILDNESS” and the graph of bottle. The Trademark Review and Adjudication Board (TRAB) held as follows: Descriptive words like “CLINICALLY PROVEN MILDNESS” used on goods of “Skin care powder; etc.” in Class 3 directly indicate the functional feature of the goods, which results in lacking distinctiveness. In the meanwhile, such words tend to cause confusion among consumers regarding the quality of the goods. Therefore, such words shall not be deemed as the part of which the exclusive right to use can be disclaimed. Beijing First Intermediate Court held as follows: According to Article 8(1)(6) of the Chinese Trademark Law 1993, “any word or design that directly indicate the quality, main raw material, function, use, weight, quantity or other features of the goods shall be prohibited from use as trademarks.” Words of “CLINICALLY PROVEN MILDNESS” fall under said circumstance and can neither be used as trademarks nor be deemed as the part of which the exclusive right to use can be disclaimed. The applicant has no legal ground to disclaim to the exclusive right to use said words. As the subject trademark contains the words prohibited from use as trademarks and thus violates the foregoing provisions, the subject trademark shall not be approved for registration. [1]
In the above mentioned case, Beijing First Intermediate Court deemed that signs prohibited from use as trademarks do not fall under the circumstances where the exclusive right to use can be disclaimed. Of course, signs prohibited from use as trademarks specified in Article 8(1)(6) of the Chinese Trademark Law 1993 have been amended to read as signs lacking distinctiveness which shall be prohibited from registration as trademarks prescribed by Article 11 of the Chinese Trademark Law 2001. According to the Chinese Trademark Law 2001, if the words of “CLINICALLY PROVEN MILDNESS” were deemed as signs prohibited from registration as trademarks due to lacking distinctiveness, such signs fall under the circumstance where the exclusive right to use can be disclaimed and the trademark may obtain registration by disclaiming the exclusive right to use that part of signs. On the other hand, the Trademark Examination Standards jointly promulgated by the CTMO and the TRAB in 2005 prescribed as follows: “For trademarks which consist of signs lacking distinctiveness and other elements, if the trademark on designated goods tends to cause confusion among the relevant public with regard to the features of the goods, such trademark shall be rejected according to Article 10(1)(8) of the Chinese Trademark Law 2001, even if the applicant disclaims the exclusive right to use.” According to the TRAB’s opinion in the above case, the words of “CLINICALLY PROVEN MILDNESS” not only directly indicate the functional feature of the goods, but also tend to cause confusion among consumers with regard to the quality of the goods, therefore the words do not fall under the circumstance where the exclusive right to use can be disclaimed. Thus, even with reference to the current trademark provisions, it is still possible that words of “CLINICALLY PROVEN MILDNESS” will be deemed not to fall under the circumstance where the exclusive right to use could be disclaimed. While the applicant has disclaimed the exclusive right to use the words of “CLINICALLY PROVEN MILDNESS,” the subject trademark is still likely to be rejected for violating Article 10(1)(8) of the Chinese Trademark Law 2001.
In the rejection appeal case of trademark “JIA DUO BAO in Chinese and BEST DRINK and Design,” the
52 subject trademark designated on goods of “Fruit extracts; Alcoholic; etc.” in Class 33 contains the words of “BEST DRINK.” However, the applicant did not disclaim part of the exclusive right to use during process of filing the trademark application before the CTMO. It was until the rejection review process that the applicant expressed the willingness to disclaim the exclusive right to use the words of “BEST DRINK.” The TRAB held as follows: The subject trademark is designated on goods of “Fruit extracts; Alcoholic; etc.” Even though the applicant clearly disclaimed the exclusive right to use the words of “BEST DRINK,” given the fact that said words constitute the signs having the nature of exaggeration and fraud as specified in Article 10(1)(7) of the Chinese Trademark Law 2001, said signs shall not be used as trademarks. Beijing First Intermediate Court held as follows: The subject trademark is designated on the goods of “Fruit extracts; Alcoholic; etc.” and the words of “BEST DRINK” constitute signs having the nature of exaggeration and fraud, thus the subject trademark shall not be used as a trademark. Even though the applicant clearly disclaimed the exclusive right to use said words during the administrative procedure, the subject trademark shall not be approved for registration as a trademark, because it contains signs prohibited from use as trademarks. Beijing High Court held as follows: According to Article 10(1)(7) of the Chinese Trademark Law 2001, signs having the nature of exaggeration and fraud shall not be used as trademarks. The subject trademark contains the words of “BEST DRINK,” therefore, when used on beverage products, it causes impractical exaggeration effect, which tends to cause confusion and deception among consumers. Although designed in a smaller font than the part of “JIA DUO BAO in Chinese,” the words of “BEST DRINK” are still in violation of the Chinese Trademark Law 2001 with its nature of exaggeration and fraud. Therefore, the illegality of the words of “BEST DRINK” shall not be ignored for its smaller font or lacking distinctiveness. [2]
According to the opinions of the TRAB, Beijing First Intermediate Court and Beijing High Court in the case of “JIA DUO BAO in Chinese and BEST DRINK and Design,” for those signs having the nature of exaggeration and fraud which shall be prohibited from use as trademarks, even though the applicant disclaimed the exclusive right to use that part of the signs, such signs shall not be contained as part of the trademarks. In fact, in addition to prohibited signs with the nature of exaggeration and fraud as specified in Article 10(1)(7) of the Chinese Trademark Law 2001, other signs prohibited from use as trademarks specified in Article 10 also shall not be used as part of the trademarks, even if the corresponding exclusive right to use is disclaimed. For example, in the rejection appeal case of trademark “China Star in Chinese and CHINA STAR ENTERTAINMENT CROUP and Design,” although the applicant disclaimed the exclusive right to use the words of “China in Chinese” and “CHINA,” the TRAB, Beijing First Intermediate Court and Beijing High Court all held the view that, the subject trademark, as a whole, is similar to the name of China, violating the Article 10(1)(1) of the Chinese Trademark Law 2001, and shall not be approved for registration.[3] In the rejection appeal case of trademark “Tri-Ring Group Expert of Advance Ceramic in Chinese and CCTC Expert Of Advance Ceramic and Design,” although the applicant disclaimed the exclusive right to use the words of “Expert of Advance Ceramic in Chinese” and “Expert of Advance Ceramic,” the TRAB and Beijing First Intermediate Court both held that, as the subject trademark contains the words of “Expert of Advance Ceramic in Chinese” and its corresponding English words of “Expert of Advance Ceramic,” the relevant public is likely to reckon the goods designated under the subject trademark as ceramic products, while the goods designated under the subject trademark like watch cases and clockworks have not designated the material or quality. Therefore, use of the subject trademark on goods such as the watch cases and clockworks will cause confusion among the relevant public regarding the material and quality thereof, and may further result in misunderstanding or misleading. This type of words are signs having other detrimental influences specified in Article 10(1)(8) of the Chinese Trademark Law 2001 and shall not be approved for registration.[4]
53
Judging from the legislative intention, Article 10 of the Chinese Trademark Law 2001 is the absolute ground for prohibiting signs from registration and use, aiming at protecting public interest and public orders. Therefore, the trademark authorities in China imposed strict requirements on examination in accordance with this provision. Once a sign is deemed as prohibited from use as trademarks, said sign shall not be contained in any trademark under any circumstance. Namely, any signs prohibited from use as trademarks for violating Article 10 of the Chinese Trademark Law 2001 can neither be independently registered or used as a trademark, nor be registered or used as part of a trademark. Even if the exclusive right to use the signs prohibited from use as trademarks has been disclaimed, those signs still shall not be contained as part of a trademark. In other words, signs prohibited from use as trademarks for violating Article 10 of the Chinese Trademark Law 2001 do not fall under the circumstance where the exclusive right to use can be disclaimed, and the trademark may not obtain registration as a whole by disclaiming part of the exclusive right to use the signs prohibited from use.
II. Whether a trademark may obtain registration by disclaiming part of the exclusive right to use signs conflicting with other’s prior right?
In the dispute cancellation case of trademark “banny OFFICE DEPOT,” the disputed trademark is “banny OFFICE DEPOT” designated on goods of “Chronographs; Weighing apparatus and instruments; etc.” in Class 9, and the exclusive right to use “OFFICE DEPOT” is disclaimed. Beijing First Intermediate Court held as follows: The disputed trademark “banny OFFICE DEPOT” completely contains the cited trademark “OFFICE DEPOT,” and fails to establish a meaning distinctively distinguished from the cited trademark. Although the applicant of disputed trademark disclaims the exclusive right to use “OFFICE DEPOT” as manifested in the trademark record, the relevant public will identify the trademark as a whole. Therefore, the disputed trademark and the cited trademark constitute similar trademarks.[5]
Based on the view of Beijing First Intermediate Court in “banny OFFICE DEPOT” case, the fact that the exclusive right to use “OFFICE DEPOT” contained in the disputed trademark is disclaimed does not affect the judgment on similarity between the cited trademark and the disputed trademark. The author totally agrees with this.
First, disclaiming the exclusive right to use part of the signs in the trademark does not mean that the trademark examination authority shall abandon the examination regarding said part of signs, and it does not mean that said part of signs of which the exclusive right to use is disclaimed is not a part of the whole trademark, either. The TRAB and the courts held similar views in other cases. For example, in the rejection appeal case of trademark “ADVANCED MEDICAL OPTICS,” Beijing First Intermediate Court held as follows: Although the exclusive right to use the word of “MEDICA” in the trademark application of “ADVANCED MEDICAL OPTICS” is disclaimed, it does not mean the word shall be regarded as not existing in the trademark application, and it does not mean that the meaning of “MEDICA” can be ignored in comprehending the whole meaning of the trademark application.[6] In the rejection appeal case of trademark “Tri-Ring Group Expert of Advance Ceramic in Chinese and CCTC Expert Of Advance Ceramic and Design,” the TRAB held as follows: The fact that the applicant disclaims the exclusive right to use the words of “Expert Of Advance Ceramic in Chinese” and “Expert Of Advance Ceramic” does not constitute the ground for the approval of registration for the trademark. Beijing First Intermediate Court held as follows: No matter whether the applicant disclaims the exclusive right to use the words of “Expert Of Advance Ceramic in Chinese” and “Expert Of Advance Ceramic” or not, it will
54 not affect the fact that the relevant public would identify and recognize the applied trademark as a whole with the foregoing words as a part thereof. Therefore, the applicant’s disclaimer to the exclusive right to use the foregoing words is insufficient to avoid misunderstanding or misleading among the relevant public. In the “banny OFFICE DEPOT” case, the disputed trademark “banny OFFICE DEPOT,” which consists of “banny” and “OFFICE DEPOT,” is filed for application and approved of registration as a whole. Although the exclusive right to use the sign of “OFFICE DEPOT” in the disputed trademark has been disclaimed, it does not mean the sign of “OFFICE DEPOT” has been deleted from the disputed trademark. Rather, the sign of “OFFICE DEPOT” is still a component of the disputed trademark. In comparison with “banny,” the font of “OFFICE DEPOT” is smaller, but it is insufficient to distinguish the disputed trademark from the cited trademark.
Second, disclaiming the exclusive right to use part of the signs contained in a trademark does not mean the relevant public are aware of said disclaimer in the process of identifying the trademark, and it does not mean said signs would not cause confusion or misleading as the exclusive right to use the part of signs has been disclaimed. According to the current practice, information about the disclaimer to part of the exclusive right to use a trademark will usually be recorded in the trademark gazette, trademark registration certificate and trademark archives. However, information in relation to disclaimer to part of exclusive right to use a trademark disclosed via foregoing documents or media is quite limited to the relevant public. In addition, generally, trademark users will not illustrate or point out the above information and fact of said disclaimer when using the trademark in business operation. For the above reasons, even if part of the exclusive right to use a trademark is disclaimed, the relevant public cannot easily obtain the information thereof, and may still actually identify the trademark as a whole. In the rejection appeal case of trademark “BIAN MI SHU in Chinese and Design” (“BIAN MI in Chinese” means “Constipation,” and “SHU in Chinese” means “Comfort”), Beijing First Intermediate Court held as follows: Although the applicant has disclaimed the exclusive right to use the word of “BIAN MI in Chinese” in the process of application for the subject trademark, the disclaimer only means that said part of “BIAN MI in Chinese” will not be taken into consideration during the process of protection for the applied trademark. However, said part will still be contained in the applied trademark when the applied trademark is used. As there is no way for the relevant public to get aware of the applicant’s intention of the disclaimer to exclusive right to use a trademark, the relevant public generally will still identify the words of the disclaimed part of signs as component of the trademark. Therefore, said part of signs is still the object of examination in the trademark review and adjudication.[7] In the “banny OFFICE DEPOT” case, although the exclusive right to use the words of “OFFICE DEPOT” has been disclaimed, the relevant public will still identify “OFFICE DEPOT” as a part of the disputed trademark. Therefore, disclaiming the exclusive right to use “OFFICE DEPOT” can neither lower the degree of similarity between the disputed trademark and the cited trademark, nor avoid confusion and misunderstanding among the relevant public.
The “banny OFFICE DEPOT” case involves the issue whether a trademark may obtain registration as a whole by disclaiming part of the exclusive right to use the signs conflicting with other’s prior registered trademark. If it is extended to other cases, the issue will be whether a trademark may obtain registration by disclaiming part of the exclusive right to use the signs conflicting with other’s prior right. The significance of “banny OFFICE DEPOT” case is to declare through the form of court judgment that disclaiming part of the exclusive right to use a trademark does not affect the determination on whether the trademark conflicts with other’s prior right; and a trademark may not obtain registration as a whole by disclaiming part of the exclusive right to use the signs conflicting with other’s prior right.
55 III. Summary
Based on the current laws and practice in China, there are certain restrictions on disclaimer to part of the exclusive right to use a trademark, and not all signs of which the exclusive right to use can be disclaimed. The part of which the exclusive right to use a trademark can be disclaimed are generally the signs prohibited from use as trademarks for lacking distinctiveness as stipulated in Article 11 of the Chinese Trademark Law 2001. However, the trademark may not obtain registration by disclaiming part of exclusive right to use the signs prohibited from use as trademarks, and the trademark may not obtain registration by disclaiming part of the exclusive right to use the signs conflicting with other’s prior right, either. In practice, regarding the restrictions on disclaimer to part of the exclusive right to use a trademark, the following two issues shall be paid attention to.
First, disclaiming the exclusive right to use part of signs does not mean that said part has been removed from the trademark, and it does not mean that the disclaimer to part of the exclusive right to use a trademark certainly complies with the rules of trademark registrability. Some applicants are not clearly aware of the Chinese trademark application system, who mistakenly believe that disclaiming part of the exclusive right to use trademarks may circumvent the mandatory regulations on the signs prohibited from use as trademarks, and may circumvent the conflict with other’s prior right. Thus, when selecting the proposed trademarks, the applicant shall examine and evaluate the trademarks in advance, and make a judgment on whether the exclusive right to use part of the signs contained in the trademark can be disclaimed.
Second, disclaiming the exclusive right to use part of signs does not mean the trademark examination authorities shall abandon the necessary examination, and it does not mean that the owners of prior right shall abandon legal relief to claim their right, either. Trademark examination authority shall adhere to comprehensive adjudication on whether the signs of which the part of the exclusive right to use has been disclaimed fall under to the circumstances where said signs can be disclaimed. The examination scope covers the following: Whether the signs of which the part of the exclusive right to use has been disclaimed are the signs prohibited from registration as trademarks for lacking distinctiveness as stipulated in Article 11 of the Chinese Trademark Law 2001; Whether the signs are those prohibited from use as stipulated in Article 10 of the Chinese Trademark Law 2001; and whether the signs conflict with others’ prior right as stipulated in provisions like Articles 28 and 31 of the Chinese Trademark Law 2001 and other laws and regulations.
NOTES:
[1] Beijing First Intermediate Court Administrative Judgment (2004) Yi Zhong Xing Chu Zi No. 1006 [2] Beijing High Court Administrative Judgment (2005) Gao Xing Zhong Zi No. 13 [3] Beijing High Court Administrative Judgment (2005) Gao Xing Zhong Zi No. 82 [4] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 522 [5] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 1646 [6] Beijing First Intermediate Court Administrative Judgment (2006) Yi Zhong Xing Chu Zi No. 199 [7] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 1894
56 【IN-DEPTH RESEARCHES】
Starting Time of Application for Three-year Non-use Trademark Cancellation
Author: Mr. Jason WANG, partner at Beijing East IP Law Firm, trademark attorney and PRC Attorney-At-Law, Trademark Law Committee member at the Beijing Bar Association
* This article is the English translation for Mr. Wang’s article in Chinese published on China Trademark magazine (Issue 2, 2013). China Trademark magazine is sponsored by China Trademark Association under supervision of the State Administration for Industry and Commerce (SAIC) overseeing the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB).
The cases of three-year non-use trademark cancellation have been on the rise in the recent years and have attracted more and more attention. However, as to some special circumstances (such as the trademark obtaining registration after the opposition procedure and the international trademark registration designating China for territorial extension), the registration date (the date when the exclusive right to use a trademark is granted) may probably be inconsistent with the date when the registration status has been confirmed (the date when the trademark administration or judicial authority finally determines and grants the trademark right). As for the calculation of the starting time of application for three-year non-use trademark cancellation under those special circumstances, there are still certain “minefield” and “blind spots” in practice, which shall deserve much attention. In particular, Administrative Measures for Law Firm’s Engagement in Trademark Agency Business jointly promulgated by the State Administration for Industry and Commerce (SAIC) and the Ministry of Justice has been implemented since January 1, 2013. The PRC attorneys-at-law at the law firms licensed by the justice department may encounter the aforementioned issues when engaging in such new business of trademark agency.
Ⅰ. Circumstances where the registration date is inconsistent with the date when the registration status is confirmed for trademarks
Article 44(4) of the Chinese Trademark and Rule 39 of Implementing Regulations of the Chinese Trademark Law prescribe that any entity or individual can file the cancellation application against a registered trademark which has ceased to use for three consecutive years. Undoubtedly, one of the fundamental requirements to claim the cancellation against the trademark registration based on three-year non-use is that the third anniversary of the trademark registration has expired, starting from the registration date to the application date of cancellation. The issue is, the registration date (the time when the exclusive right to use a trademark is granted) may probably be inconsistent with the date when the trademark registration status is confirmed (the time when the trademark administration or judicial authority finally determines and grants the trademark right). Trademark Examination Standard stipulates the starting time of application for three-year non-use trademark cancellation, namely, three years traced back to the date of cancellation application. However, the regulations do not directly and clearly define the nature of the time node at the other end of said three years, namely, whether the time node at the other end is trademark registration date or the date when the registration status is confirmed. It seems that there is legal vacancy in deciding the starting time of application for three-year non-use trademark cancellation, and the “law” is absent for application here. It is exactly because of the legal vacancy in appearance that different interpretations on existing legislations have caused confusion, questioning and disputes among the public.
57 According to Paragraph 2, Rule 39 of Implementing Regulations of the Chinese Trademark Law, where the trademark registrant against which the application for three-year non-use cancellation is filed fails to furnish, upon receipt of the notice from the Chinese Trademark Office, evidence and materials of use of the subject trademark before the date on which the application for cancellation is filed, the trademark registrant shall provide the justified reasons for the non-use. Trademark Examination Standard and Rule 20 of the SPC Opinions on Several Issues concerning Trial of Administrative Cases involving Granting and Determination of Trademark Rights (Fa Fa [2010] No. 12) stipulates that force majeure, policy restriction, bankruptcy liquidation and other reasonable and objective reasons which cannot be attributed to the trademark registrant can be identified as justified reasons. In current practice, the CTMO holds the view that when the registration date is inconsistent with the date when the trademark registration status is confirmed, it should be three years from the confirmation date of trademark registration status to the application date of three-year non-use trademark cancellation. Otherwise, the CTMO will issue a rejection notice of the cancellation application and will not accept the case. The legal basis for this practice also seems to be justified reasons. Namely, until the registration status is confirmed, the registrant has justified reasons for non-use of the trademark, and the registered trademark shall not be cancelled due to non-use in three consecutive years.
The circumstances where the registration date is inconsistent with the confirmation date of registration status mainly include those as described below: trademarks obtaining registration after the opposition procedure, and international trademark registrations designating China for territorial extension.
Ⅱ. Trademarks obtaining registration after the opposition procedure
According to Article 30 of the Chinese Trademark Law, for a preliminarily approved trademark, if no opposition has been filed upon expiration of the publication period, the registration shall be approved, a certificate of trademark registration shall be promulgated, and the trademark registration shall be published. Article 37 of the Chinese Trademark Law stipulates that the period of validity of a registered trademark shall commence from the date of approval for registration. Thus, the date when the exclusive rights to use a trademark is granted is in general the same as the date when the registration status is confirmed. However, Paragraphs 2 and 3, Article 34 of the Chinese Trademark Law stipulate as follows: “Where the opposition is dismissed, the registration for the opposed trademark shall be approved, a certificate of trademark registration shall be promulgated, and the trademark registration shall be published. Where the trademark obtains registration after opposition based on the ground that the opposition arguments are dismissed, the time for the applicant to obtain the exclusive right to use the trademark commences from the expiration date of three-month preliminary approval publication period.” Thus, for a trademark obtaining registration after the opposition procedure, the date when the exclusive right to use the trademark is granted is inconsistent with the date when the registration status is confirmed. It is the exact reason that Paragraph 3, Article 34 thereof clearly stipulates the registration date for the trademark obtaining registration after the opposition procedure, while the other relevant laws do not prescribe the express regulations on the starting time of application for the three-year non-use trademark cancellation. Thus, the general public tends to misunderstand that the date of cancellation application against the trademark obtaining registration after the opposition procedure shall commence from the expiration date of the three-month preliminary approval publication period. In addition, because Implementing Regulations of the Chinese Trademark Law is lower than the Chinese Trademark Law in term of legal hierarchy, the application of Paragraph 2, Rule 39 of Implementing Regulations of the Chinese Trademark Law seems to “conflict” with Paragraph 3, Article 34 of the Chinese Trademark Law which is on the higher legal hierarchy, leaving the general public at a loss.
58
According to current practice of the CTMO, for the trademark obtaining registration after opposition procedure, the starting time of the application for the three-year non-use cancellation should be three years from the completion of opposition procedure (including subsequent opposition review or administrative proceeding) to the application date of cancellation. Rule 23 of Implementing Regulations of the Chinese Trademark Law regarding other specific regulations concerning the opposed trademark also reflects the justified reasons for non-use of the opposed trademark stipulated in Paragraph 2, Rule 39 of Implementing Regulations of the Chinese Trademark Law, and Rule 23 thereof may be used for contrast and reference.
First, Paragraph 3, Rule 23 of Implementing Regulations of the Chinese Trademark Law stipulates that the trademark obtaining registration after the adjudication on the opposition shall not have retroactive effect on another person’s act to use a sign identical or similar to said trademark registration on the identical or similar goods from the expiration date of the period for trademark opposition (the time when the exclusive right to use a trademark is granted) to the effective date of the adjudication on the opposition. The internal logic of this provision is that before the adjudication on the opposition takes effect, the right status of the opposed trademark is still uncertain. Therefore, based on the publicity effect of opposition procedure and the reasonable trust and expectation, where another person’s act is in line with the legal features of trademark infringement occurring from the date when the opposed trademark obtains the exclusive right to the date when the administrative or judicial authority confirms the right status of the opposed trademark, said act shall still be excluded from the scope of trademark infringement. In other words, although the trademark has been registered during that period, the right of said registered trademark is subject to certain restriction. From the expiration date of the three-month preliminary approval publication period to the date when the registration status of the opposed trademark is confirmed, based on the same anticipation (namely, the possibility of the opposed trademark being rejected for registration and the possibility of infringing upon other’s right if the opposed trademark is used), the applicant of the opposed trademark also has sufficient reasons for non-use of the opposed trademark within the aforementioned period. It reflects the principle of the interests balance between the trademark owner and the other parties, and the principle of equality of rights and obligations. Therefore, contrasting and referring to Rule 23 of Implementing Regulations of the Chinese Trademark Law, the starting time when the cancellation application shall be calculated from the date when the adjudication on the opposition takes effect.
Second, Paragraph 4, Rule 23 of Implementing Regulations of the Chinese Trademark Law stipulates that the time limitation for the application for review and adjudication regarding the trademark obtaining registration after the adjudication on the opposition shall be calculated from the publication date of the adjudication on the trademark opposition. Here, the time limitation for the review and adjudication shall be calculated from the publication date of the adjudication on the trademark opposition, rather than the expiration date of the publication period for the three-month preliminary approval (the time when the exclusive right to use a trademark is granted). Here, a basic conception and rule needs clarification that the review and adjudication on cancellation aims at the registered trademark. Namely, when filing an application for review and adjudication on cancellation, it is clear and certain that the subject trademark has already obtained registration. Only after the adjudication on opposition has taken effect and the opposed trademark has obtained registration, may the third party and the public file an application for review and adjudication. However, prior to the effectiveness of the adjudication on opposition, the right status and the legal effect of the opposed trademark still remain uncertain. The mandatory requirements of law regarding trademark use for three consecutive years are only applicable to the registered trademark, rather than the unregistered trademark or during the period prior to its registration
59 status has been confirmed. Since the status on whether the opposed trademark can obtain registration can be confirmed until the completion of the opposition procedure, it will be obviously inconsistent with the jurisprudence and legal spirit, if mandatory requirements are imposed for trademark use before the completion of opposition, opposition review or administrative procedure.
Ⅲ. International trademark registrations designating China for territorial extension
First, Rule 19 of Implementing Measures of Madrid International Trademark Registration promulgated by the SAIC prescribes as follows: “Where an international trademark registration that has been protected in China is under any of the circumstances prescribed in Article 41 of the Chinese Trademark Law, the application for adjudication on disputes or cancellations shall be filed with the Trademark Review and Adjudication Board (TRAB) after the expiration of the time limitation for rejection of such trademark in China.” The application for cancellation prescribed here obviously excludes the circumstance of three-year non-use cancellation against the registered trademark prescribed by Article 44(4) of the Chinese Trademark Law. Thus, Implementing Measures of Madrid International Trademark Registration can be used for reference, but cannot be directly applied to three-year non-use cancellation of the international trademark registration. As to the starting time to apply for the three-year non-use cancellation of the international trademark registration designating China for territorial extension, the most directly related current legal basis may be traced back to the justified reasons prescribed in Paragraph 2, Rule 39 of Implementing Regulations of the Chinese Trademark Law.
Second, according to the Madrid Agreement and the Madrid Protocol, the legal protection of the exclusive right to use an international trademark registration shall commence from the registration date of such trademark. Rule 20 of Implementing Measures of Madrid International Trademark Registrations regulates as follows: “International trademark registration designating China for territorial extension may, as of the date when the time limitation for rejection of the trademark has expired, apply to the CTMO for issuing the certificate proving that the trademark has been protected in China.” According to the foregoing provision, the date when the registration status of the international trademark registration in China may be confirmed is the expiration date of the rejection time limitation thereof. The time limitation of rejection is a very important conception in determining the status of the international trademark registration. The time limitation of rejection shall be calculated as 12 months (for the registrant of international trademark registration of a contracting party to the Madrid Agreement) or 18 months (for the registrant of international trademark registration of a contracting party to the Madrid Protocol) since the Docketing Date as indicated in the application received by the authority of the designated contracting party (i.e. the CTMO where the international trademark registration designates China for territorial extension). It is worth noting that the Docketing Date is different from the registration date for the international trademark registration. The registration date of the international trademark registration as of the time when the exclusive right thereof is protected by the Chinese law is inconsistent with the date when the registration status (namely, the status of protection designating China for territorial extension) of such trademark in China is confirmed. It is the exact reason that the registration date of the international trademark registration is inconsistent with the date when the registration status of such trademark in China is confirmed. Therefore, before the expiration of the time limitation of rejection, it cannot be ascertained whether such international trademark registration may be entitled to the exclusive right in the end. Thus, according to the similar logic and reasons above mentioned for the application for three-year non-use cancellation of trademark obtaining registration after opposition procedure, the starting time of the application for three-year non-use cancellation against the international trademark registration designating China for territorial extension shall be calculated
60 from the expiration date of the time limitation of rejection in China, rather than the registration date.
In addition, many differences exist between the international trademark registration designating China for territorial extension and the trademark application for registration directly filed in China. Compared with the trademark application for registration directly filed in China, the international trademark registration designating China for territorial extension is more complicated. Thus, the public and practitioners in China have relatively fewer knowledge of the procedures and regulations of the international trademark registration. At present, the CTMO website can directly demonstrate the registration date of the international trademark registration, but it cannot show the time limitation of rejection of such international trademark registration. The WIPO website cannot directly show the time limitation of rejection of the international trademark registration, either. The time limitation of rejection of the international trademark registration designating China for territorial extension may only be calculated after securing the information about the Docketing Date through the WIPO website. This is also an important reason why the interested parties, trademark agents and attorneys tend to confront with “minefield” and “blind spots” in practice.
Ⅳ. Suggestions
First, because of the legal vacancy and vague definition among different regulations, there are different understandings among the public about the starting time of the application for three-year non-use cancellation. This not only misleads the public to make wrong assessments and expectations, but also takes up the precious review resources of trademark administrative authorities. Avoiding unnecessary examination workload is a very important aspect to save the administrative resources and shorten the time frame of examination. Obviously, it is necessary to illustrate to and instruct the public by multiple means in addition to trainings and presentations concerning trademark business, such as specifying the starting time in special circumstances of three-year non-use cancellation against the registered trademark in legal instruments with the legal hierarchy such as as Trademark Examination Standard or notice, or even Implementing Regulations of the Chinese Trademark Law.
Second, the applicants, the trademark agents, and the attorneys involved in the case of three-year non-use cancellation of the registered trademark shall make full preparations in advance, investigate relevant facts and study relevant laws. Especially for the trademark agents and attorneys, they shall endeavor to probe into and reveal risks beforehand, so as to precisely master the time limitation of filing the application for three-year non-use cancellation of the registered trademark, combined with other information resources. Specifically speaking, the CTMO website can only reveal the date of the adjudication on trademark opposition and the opposition review, the information concerning the trademark administrative litigation procedures shall be verified combined with trademark publication gazette and other resources. As for the right status and information of the international trademark registration, it shall be acquired through the WIPO website and relevant trademark publication gazette in addition to the CTMO website. The trademark agents and PRC attorneys-at-law who newly enter into trademark agency industry shall pay more attention when engaging in the application for three-year non-use cancellation of the registered trademark.
61 【HOT TOPICS AND TIPS】
Key Amendments of New Chinese Trademark Law 2013
Co-author: Mr. Jason WANG, partner at Beijing East IP Law Firm, trademark attorney and PRC Attorney-At-Law, Trademark Law Committee member at the Beijing Bar Association
Co-author: Ms. Yan ZHANG, partner at Beijing East IP Law Firm, trademark attorney and PRC Attorney-At-Law, China Trademark Office Subcommittee of the Trademark Office Practices Committee at INTA
On August 30, 2013, China National People’s Congress enacted the amended Chinese Trademark Law, and the Chinese Trademark Law 2013 is effective as of May 1, 2014.
The current Chinese Trademark Law was enacted in 1982 and amended in 1993 and 2001 respectively. The first amendment in 1993 is mainly to accommodate China’s market economy system, the second amendment in 2001 is mainly to adapt to China’s accession to the WTO, and the third amendment in 2013 is mainly to implement the national intellectual property strategy. In this paper, we have sorted out the key amendments of the Chinese Trademark Law 2013.
1. Time limitation is set for major matters of trademark prosecutions before the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB).
For the first time, the Chinese Trademark Law 2013 has set the time limitation for the following major matters of trademark prosecutions: 1) Preliminary examination for registration; 2) Rejection appeal; 3) Appeal against the CTMO invalidation decision regarding provisions of Article 10 (prohibition of using and registration as trademarks, such as name of country, deceptive signs, and geographical names well known to the public), Article 11 (lack of distinctiveness for two-dimensional marks), Article 12 (lack of distinctiveness for three-dimensional marks), or registration acquired by fraud or any other unfair means; 4) Cancellation based on generic names or three-year non-use; 5) Appeal against the CTMO cancelation decision; 6) Opposition; 7) Opposition appeal; and 8) Invalidation requested by the prior right holder or interested party. This provides a legal basis for the establishment of efficient trademark prosecution system. Trademark authorities (both the CTMO and the TRAB) have also attempted to accelerate trademark examination process by taking measures such as increasing personnel. However, as the amounts of trademark cases are hugely increasing, and trademark examination work is becoming more and more difficult, the public demand on shortening trademark prosecution periods also continues to increase.
In the Chinese Trademark Law 2013, three types of time limitations are set: 1) Nine Months; 2) Nine Months plus Three Months; and 3) Twelve Months plus Six Months.
1.1 Nine Months
According to Article 28 of the Chinese Trademark Law 2013, the CTMO shall complete the preliminary examination for registration within 9 months after the receipt of trademark applications. The trademark
62 prosecution period has been shortened to the current 10 months from 2-3 years before 2009. This provision is in line with current practices.
1.2 Nine Months plus Three Months
According to the Chinese Trademark Law 2013, the CTMO/ TRAB shall render the decisions within 9 months after the receipt of the requests for rejection appeal, invalidation appeal, non-use cancellation and/or generic terms cancellation. Additional 3 months may be extended under special circumstances.
1) Rejection appeal before the TRAB [Article 34]
2) Appeal against the CTMO invalidation decision before the TRAB regarding provisions of Article 10 (prohibition of using and registration as trademarks, such as name of country, deceptive signs, and geographical names well known to the public), Article 11 (lack of distinctiveness for two-dimensional marks), Article 12 (lack of distinctiveness for three-dimensional marks), or registration acquired by fraud or any other unfair means [Paragraph 2, Article 44]
3) Invalidation filed by third parties other than the CTMO regarding the same ground prescribed by Paragraph 2, Article 44 before the TRAB [Paragraph 3, Article 44]
4) Cancellation based on generic names filed by any one before the CTMO [Article 49]
5) Cancellation based on three-year non-use filed by any one before the CTMO [Article 49]
6) Appeal against the CTMO cancelation decision regarding the same ground prescribed by Article 49 before the TRAB regarding cancellation based on generic names or three-year non-use [Article 54]
1.3 Twelve Months plus Six Months
According to the Chinese Trademark Law 2013, the CTMO shall render the decisions regarding opposition within 12 months after expiration of gazette of preliminary approval. The TRAB shall render the decisions regarding opposition appeal and invalidation requested by the prior right holder or interested party within 12 months after the receipt of the requests. Additional 6 months may be extended under special circumstances.
1) For the opposition before the CTMO: the CTMO shall render the decisions regarding opposition within 12 months after expiration of gazette of preliminary approval. [Paragraph 1, Article 35].
2) For the opposition appeal and invalidation requested by the prior right holder or interested party before the TRAB: the TRAB shall render the decisions within 12 months after the receipt of the requests. [Article 35; Paragraph 2, Article 45]
Given that the above matters involve grounds based on private rights (except the opposition based on the public interests), which are more complicated, the time limitation thereof is set longer than other matters.
63 The challenge, though, is that the trademark prosecution period is shortened, while the number of trademark examiners remains the same, how to ensure the examination quality. For parties and agencies concerned, it is about how to deal with skyrocketing caseload.
2. Opposition and opposition appeal system is further optimized.
2.1 Qualification of the opponent is restricted in accordance to grounds of the opposition.
Different from the Chinese Trademark Law 2001, where any entity may file the opposition based on various grounds, the Chinese Trademark Law 2013 distinguishes the qualification of the opponent based on the different grounds of the opposition. [Article 33]
1) On the one hand, as the opponent, the prior right holder or interested party may file the opposition based on their private rights for Paragraph 2 and 3 of Article 13 (well-known mark), Article 15 (fully aware trademarks with prior use of others based on contracts, business relationships or other relationships), Paragraph 1 of Article 16 (geographic indication), Article 30 (identical or similar to prior trademark registrations, preliminarily approved marks on identical or similar goods/services), and Article 31 (identical or similar to prior marks with prior preliminary approval and gazette).
2) On the other hand, any entity (including the prior right holder or interested party) may, as the opponent, file the opposition based on the public interests for Article 10 (prohibition of using and registration as trademarks, such as name of country, deceptive signs, and geographical names well known to the public), Article 11 (lack of distinctiveness for two-dimensional marks), and Article 12 (lack of distinctiveness for three-dimensional marks).
First, the above distinction is clearer and more reasonable in jurisprudential logic. Second, to combine the qualification of the opponent with grounds of the opposition may curb malicious opposition to some extent.
2.2 Opposition appeal procedure is partially cancelled in favor of the opposed party.
Article 35 of the Chinese Trademark Law 2013 partially cancelled the opposition appeal procedure in favor of the opposed party.
1) On the one hand, if the opposed party wins the opposition, the losing opponent is not entitled to initiating the opposition appeal procedure before the TRAB, and the opposed mark will obtain registration. Instead, the losing opponent may seek to file invalidation against the registered trademark before the TRAB. [Paragraph 2, Article 35] This limits the right of the opponent but also protects their right to seek remedy.
2) On the other hand, if the opposed party loses the opposition, it may still appeal to the TRAB via the opposition appeal procedure before the TRAB. [Paragraph 3, Article 35]
This provision appropriately streamlines administrative examination and approval procedures in favor of the opposed party. For the opponent, it shall pay attention to setting forth adequate grounds for opposition and providing sufficient evidence materials in opposition proceedings.
64 3. Well-known trademark protection system is further clarified.
3.1 Well-known trademark recognition is based on the request of the trademark right holder and facts to be ascertained according to the necessity of the cases.
The well-known status of a trademark shall be recognized upon the request of the party concerned and shall be deemed as a fact to be ascertained according to the necessity of the trademark cases. [Paragraph 1, Article 14] According to the intent of well-known trademark legislative protection, well-known trademark recognition is based on findings of fact, rather than relatively stable or even immutable legal conclusions or judgments; well-known status of a trademark shall be recognized upon the request of the parties concerned, and trademark authorities shall not “ex officio” recognize the well-known trademark; well-known status of a trademark shall be recognized according to the necessity of the trademark cases, and the recognition procedure shall not be initiated necessarily when there are sufficient remedies under other laws and regulations. This provision clarifies the passive protection, necessity and fact-finding principles of well-known trademarks.
3.2 Types of cases involved and specific authorities governing well-known trademark recognition
Paragraph 2 to 4 of Article 14 of the Chinese Trademark Law 2013 expressly prescribes types of trademark cases involved and specific authorities governing well-known mark recognition in the following five specific disputes:
1) Opposition: the CTMO [Paragraph 2, Article 14];
2) Complaint before the the local Administration for Industry and Commerce (AIC) for trademark infringement disputes: the CTMO (reported by the local AIC) [Paragraph 2, Article 14];
3) Trademark dispute cases (opposition appeal, invalidation requested by the prior right holder or any interested party): the TRAB [Paragraph 3, Article 14];
4) Trademark infringement civil lawsuit: Courts designated by China Supreme Court (which means only limited courts will have the jurisdiction on trademark infringement civil lawsuits involving well-known mark protection) [Paragraph 4, Article 14];
5) Trademark administrative lawsuits: Courts designated by China Supreme Court (Beijing First Intermediate Court as the first instance court, Beijing High Court as the second instance court) [Paragraph 4, Article 14]
3.3 Prohibition of using the wording “well-known trademark” for commercial activities
Paragraph 5, Article 14 of the Chinese Trademark Law 2013 adds the provision that “producers and operators shall not use the wording ‘well-known trademark’ on the products, packages or containers, or advertising promotion, exhibitions and other business activities.”
The “well-known trademark” is a legal concept, rather than a commercial concept or honor. The Chinese Trademark Law 2013 clarifies the properties of the well-known trademark and defines the use of the wording
65 “well-known trademark,” which will effectively curb the abnormal business needs, and get the legal demand for the well-known trademark back on track.
4. Trademark protection is further strengthened.
4.1 Forms of trademark infringement are further clarified.
1) The Chinese Trademark Law 2013 further clarifies the criteria of trademark confusion among the public and separates Article 52 of the Chinese Trademark Law 2001 into two items: A) to use a trademark that is identical with a registered trademark on identical goods; B) to use a trademark that is similar to a registered trademark on identical goods or to use an identical or similar trademark on similar goods, that is likely to cause confusion. [Item 1 and Item 2, Article 57] According to provisions of the TRIPs Agreement, for identical marks/signs on identical goods/services, it is assumed as confusion, without proof of confusion; for similar marks/signs on identical goods/services or identical marks/signs on similar goods/services, confusion needs to be established.
2) The Chinese Trademark Law 2013 adopts existing provision of Item 2, Article 50 of Implementing Regulations of the Chinese Trademark Law 2001 and further defines the nature of contributory infringement, by providing that the act of “intentionally providing and facilitating conditions for infringement and assisting others to carry on the infringement” shall be deemed as trademark infringement. [Item 6, Article 57]
4.2 Conflict between trade name and registered mark or unregistered well-known mark is regulated.
1) The Chinese Trademark Law 2013 adds the provision that “use of the registered trademark or unregistered well-known marks of others as a trade name contained in the enterprise name, which misleads the public and constitutes as unfair competition, shall be ruled under the Chinese Anti-Unfair Competition Law.” [Article 58] This provision clearly defines the nature of such act, which converges with the Chinese Anti-Unfair Competition Law.
2) Rule 43 of Implementing Regulations of the Chinese Trademark Law 2001 has already prescribed the complaint with local company registration authorities for conflict between registration of the trade name (enterprise name) and the well-known trademark, which prescribes as follows: “where a trademark owner believes that another person has registered his well-known trademark as a trade name, which is likely to deceive, or mislead, the public, he may file an application with the competent authority for the registration of trade names for cancellation of the registration of the trade name. The competent authority for the registration of trade names shall handle the matter pursuant to the Regulations for the Administration of Registration of Trade Names.” However, the “competent authority for the registration of trade names” prescribed in this provision apparently does not include the AIC and the court provided in the Chinese Anti-Unfair Competition Law. Article 58 of the Chinese Trademark Law 2013 expands the scope of competent enforcement authorities for the above unfair competition act.
3) Item 1, Rule 1 of China Supreme Court’s Interpretations on Issues regarding the Application of Law in Civil Cases Involving Trademark Disputes (which has binding effects on all courts in China) has prescribed that “the use of words identical or similar to another’s registered trademark as a trade name in a distinctive manner on identical or similar goods, and thus causing possible confusion among the relative public” constitutes as
66 trademark infringement. The use of trade name defined in Article 58 of the Chinese Trademark Law 2013 may be deemed as the use of complete enterprise name or non-prominent use of the trade name, which constitutes unfair competition.
4) The Chinese Trademark Law 2013 does not cover the conflict between the trade name and the registered well-known trademark. Thus, further discussions and clarifications on this issue may be needed in future administrative regulations, judicial interpretations and practices.
4.3 Damages
1) Four ways and sequences of determining the damages are further clarified as follows: A) the actual losses of the rights holder; and then B) the infringer’s profits obtained from infringement; and then C) multiples of royalty fees; and then D) maximum statutory damages up to RMB 3 million (around US$ 490,000). [Paragraph 1, Article 63]
2) The maximum statutory damages are raised from RMB 500,000 (around US$ 81,000) to RMB 3 million (around US$ 490,000). [Paragraph 3, Article 63] Compared with the maximum statutory damages RMB 500,000 (around US$ 81,000) prescribed in the current Chinese Copyright Law and RMB 1,000,000 (around US$ 162,000) prescribed in the current Chinese Patent Law, the Chinese Trademark Law 2013 will undoubtedly step up the fight against trademark infringement.
3) Punitive damages are adopted by the Chinese Trademark Law 2013. Article 63 of the Chinese Trademark Law 2013 prescribes that “where serious circumstances of infringement of exclusive trademark rights in bad faith arise,” the amount of damages may be determined with no less than double but no more than triple the abovementioned amount according to Paragraph 1, Article 63 of the Chinese Trademark Law 2013.
4) The infringer is obliged to provide all available account books and data. Paragraph 2, Article 63 of the Chinese Trademark Law 2013 adds the provision that “where the rights holder has provided all available evidence, while the infringement related account books, data are held by the infringer,” the court may order the infringer to provide the relevant account books and data; where the infringer refuses to provide or provided false account books and data, the court may reference the claims of the rights holder and the evidence provided in determining the amount of damage. This provision substantially strengthens evidence hinder system in civil lawsuit practices, and solves problems of “difficulty to prove” of trademark right holders to some extent.
5) The trademark registrant will not be awarded with damages if such registered mark is not in actual use. Paragraph 1, Article 64 of the Chinese Trademark Law 2013 adds the provision that “in case the rights holder fails to provide the evidence showing that the trademark had been used in the three years prior to the action brought, and fails to prove any other losses suffered from the infringement, the infringer shall not bear any liability for damages.” This provision converges with the non-use cancellation system and will also crack down on quatting behaviors.
4.4 Penalty in the administrative complaint is further strengthened and clarified.
Paragraph 2, Article 60 of the Chinese Trademark Law 2013 further clarifies the criteria for administrative
67 penalty for trademark infringement and increases the penalties.
1) The Chinese Trademark Law 2013 has stepped up the fight against trademark infringement, and extended scope of tools to be seized or destroyed, which are used to manufacture infringing goods, forge registered trademark labels, by changing the wording into “the primary tools” from “specially used tools” prescribed in Chinese Trademark Law 2001.
2) The Chinese Trademark Law 2013 has prescribed the specific amount of the fine.
3) The Chinese Trademark Law 2013 has prescribed situations where severer penalties shall be imposed, that is, “where two or more repetitive trademark infringements were found within five years or where other serious circumstances were found, the infringer shall be heavily punished.”
4.5 Fair use defense and prior use defense are added.
1) Fair use defense. Paragraph 1, Article 59 of the Chinese Trademark Law 2013 adopts the provision in Rule 49 of Implementing Regulations of the Chinese Trademark Law 2001, that is, others may duly use “the generic name, shape or model of the goods in respect of which it is used, or directly indicates the quality, main raw material, function, use, weight, quantity and other features of the goods, or a place name contained in a registered trademark.” Further, Paragraph 2, Article 59 of the Chinese Trademark Law 2013 adds the fair use for “any shape derived from the goods itself, product shape required to obtain the technical effect, or shape that gives a substantive value to the goods contained in a three-dimensional registered trademark.” The fair use defense is an important trademark infringement defense, and it is frequently adopted in judicial judgments. This provision reflects the basic issues of trademark right limit system.
2) Prior use defense. Paragraph 3, Article 59 of the Chinese Trademark Law 2013 adds the provision that “where prior to an application of trademark registration by a trademark registrant, others have been using identical or similar trademark on identical or similar goods prior to the trademark registrant, and such trademark has acquired certain influence, the trademark registrant shall have no right to prohibit said trademark user from continuing to use that trademark within the original scope of use, but may require it to attach additional appropriate distinctions.” This provision, in fact, affirms the prior use system of an unregistered trademark. Also, the protection precedents of prior use already exist in China’s practices. This provision will be helpful to achieve the balance between the interests of the prior user of an unregistered trademark and the registered trademark owner, reflect the value of trademark use, and curb trademark quatting.
5. Good faith principle of trademark filing is emphasized and bad faith filing is to be further cracked down
5.1 Catch-all provision of the good faith principle is added in the Chinese Trademark Law 2013. Paragraph 1, Article 7 of the Chinese Trademark Law 2013 prescribes as follows: “The application for registration and use of the mark shall comply with the principle of good faith.” The principle of good faith is a fundamental principle of civil activities, and is also the “Imperial Clause” of the Chinese Civil Law and the Chinese Anti-Unfair Competition Law. However, there are still a large number of malicious quatting acts, for which we cannot find the specific provision in the Chinese Trademark Law 2001 as a legal basis, thereby having to apply other legal
68 clauses instead (for instance, “registration acquired by fraud or any other unfair means” prescribed in Paragraph 1, Article 41 of the Chinese Trademark Law 2001 and other unhealthy influence prescribed in Paragraph 1 (8), Article 10 of the Chinese Trademark Law 2001) This provision has solved the legal “vacancy” problem. However, the application issue of such catch-all provision has yet to be refined in other laws and regulations, and also subject to theoretical and practical exploration.
5.2 Hijacking of another party’s unregistered mark with prior use based on the ground that the applicant is aware of such prior mark because the applicant has contractual, business or other relationships with the other party is prohibited. Paragraph 2, Article 15 of the Chinese Trademark Law 2013 adopts the provision that “where a trademark application is identical or similar to the other party’s unregistered trademark with prior use on the identical or similar goods, and where the applicant is aware of the existence of such other party’s trademark because the applicant has contractual, business or other relationships with the other party beyond that provided in the preceding paragraph, if such other party raises an opposition, the trademark shall be rejected for registration.” This provision requires that there should be sufficient evidence to prove that the applicant of the opposed mark “is aware of” the existence of such other party’s trademark, while does not require a certain reputation prescribed in Article 32 of the Chinese Trademark Law 2013, thereby increasing crackdown against quatters.
5.3 Trademark agencies shall not accept the entrustment of new trademark application that falls into cybersquatting circumstances. Article 19 of the Chinese Trademark Law 2013 provides that “trademark agencies shall not accept the entrustment if it knows or should know that the principal’s trademark application falls into circumstances prescribed under Article 15 and Article 32 of this Law.”
5.4 Other supporting measures are added. As mentioned above, Paragraph 1, Article 64 of the Chinese Trademark Law 2013 clarifies the system of “no use no claim,” and Paragraph 3, Article 59 adds the prior use defense. These provisions effectively discourage those copycats or trademark trolls.
6. Regulations on trademark application and registration are enhanced.
6.1 Sound mark is accepted for registration. Article 8 of the Chinese Trademark Law 2013 adopts the sound mark, and expands the scope of trademark protection. Further, the word “etc.” is added after the “sound,” which has provided the legal basis for Implementing Regulations of the Chinese Trademark Law or other administrative regulations including other elements into the scope of trademark protection.
6.2 Signs identical or similar to the national anthem, military emblem, military song, names and symbols of the Central and State organs, etc. are prohibited from using and registered as trademarks. Paragraph 1(1), Article 10 of the Chinese Trademark Law 2013 adds the “national anthem”, “military emblem”, “military song”, as well as “names and symbols of the Central and State organs.” Further, Paragraph 1(1)-(3), Article 10 of the Chinese Trademark Law 2013 adds the word “etc.”
6.3 Deceptive signs which tend to mislead the public are prohibited from using and registered as trademarks. Paragraph 1(7), Article 10 of the Chinese Trademark Law 2013 amends “having the nature of exaggeration and fraud” of the Chinese Trademark Law 2001 to read as follows: “having the nature of fraud, which tends to mislead the public on the characteristics of quality and the like or the origins of productions,”
69 which clearly defines the meaning of signs “having the nature of fraud.”
6.4 Multi-classes registrations in one application are adopted. Paragraph 2, Article 22 of the Chinese Trademark Law 2013 adds the provision of “multi-classes registrations in one application,” which is a major change in our trademark application system in line with international standards.
6.5 E-filings are adopted. Paragraph 3, Article 22 of the Chinese Trademark Law 2013 adds the provision that “documents including trademark applications for registration may be filed in writing or by data telex.” This provision not only provides electronic filing of trademark registration, but also provides a legal basis for other trademark matters involving evidence in electronic form.
6.6 Examination opinion is adopted. Article 29 of the Chinese Trademark Law 2013 adds the provision that “if the CTMO deems that the contents of an application for registration need explanation or amendment, it may request the applicant to produce thereof.” This provision will help enhance the quality of examination, and also provide convenience for the right holders.
6.7 Timeline for renewal formalities is advanced and extended. Article 40 of the Chinese Trademark Law 2013 provides that application for renewal of the registration shall be made within TWELVE months before the expiration date, extended from six months prescribed in the Chinese Trademark Law 2001. This provision provides convenience for the right holders, and is also helpful for the convergence of trademark renewal with Customs recordation, trademark license recordation, and other systems.
6.8 Requirements for trademark assignment are clarified. Paragraph 2 and 3, Article 42 of the Chinese Trademark Law 2013 adopts the provision of Paragraph 2 and 3, Rule 25 of Implementing Regulations of the Chinese Trademark Law 2001, that is, “the trademark registrant shall assign all identical or similar trademarks registered in identical or similar goods,” and “any application of an assignment of a registered trademark that tends to mislead the public or cause confusion or have adverse affects shall not be approved by the CTMO.”
6.9 Procedure and nature of license recordation is further clarified. Paragraph 3, Article 43 of the Chinese Trademark Law 2013 clarifies that “the licensor shall record its trademark license with the CTMO,” and the “trademark license” may be understood as including materials to prove the license, not having to be the license agreement or the copy of license agreement. Further, Paragraph 3, Article 43 of the Chinese Trademark Law 2013 adopts the provision in Rule 19 of China Supreme Court’s Interpretations on Issues regarding the Application of Law in Civil Cases Involving Trademark Disputes, and provides that “trademark license that are not recorded with the CTMO cannot be used against the good faith use of the registered trademark by a third party,” which is helpful to protect the interests of a good faith third party.
7. Suspension of an action is added to review and invalidation cases by TRAB and trademark infringement cases by AICs.
To avoid conflicting decisions for the same or related cases, and save administrative and judicial resources, the Chinese Trademark Law 2013 adds the provisions of suspension of action for review and invalidation cases handled by the TRAB as well as trademark infringement cases handled by the AICs.
70 1) According to Article 35 and Article 45 of the Chinese Trademark Law 2013, the TRAB may stay a review and invalidation case where a determination of prior rights involved is based on the decision of a case pending before the court or before the administrative authority. First, the suspension of an action prescribed in this Law will affect the prosecution and examination time frame. Second, this new Law does not involve the suspension of an action during the opposition procedure before the CTMO. We believe one of the goals for this new Law is to reduce trademark persecution time frame, which will inevitably be affected if the suspension of an action is added to the opposition cases by the CTMO.
2) According to Paragraph 3, Article 62 of the Chinese Trademark Law 2013, the AIC may suspend the investigation and handling of a trademark infringement, where disputes arise regarding trademark ownership or the rights holders bring trademark infringement lawsuits before the court at the same time. Given that Article 150 of the Chinese Civil Law has already provided suspension of the litigation, the Chinese Trademark Law 2013 does not involve suspension of the litigation by the court handling trademark infringement cases.
3) The Chinese Trademark Law 2013 provides that the TRAB and AICs “may” (not “shall”) suspend an action, which gives the TRAB and AICs plenty of discretions. This discretion shall be clarified with details in practice.
8. Effectiveness dates and effects of decisions and adjudications of CTMO and TRAB are further defined.
1) Effectiveness of opposition and invalidation. Article 36, 46, and 55 of the Chinese Trademark Law 2013 expressly prescribes that the effective dates of decisions and adjudications of the CTMO and TRAB begins from the “expiration of statutory limitation,” not the date when the decisions and adjudications are made: (A) decision of rejection of an application for registration by the CTMO, and decision of review of an appeal by the TRAB; [Article 36] (B) invalidation of a trademark by the CTMO, decision of review of an invalidation by the TRAB and adjudication of review of an invalidation by the TRAB; [Article 46] (C) cancelation of a trademark by the CTMO, decision of review of cancelation appeal by the TRAB. [Article 55] These provisions have clarified some uncertain issues of the Chinese Trademark Law 2001.
2) Retroactive effect of a trademark approved for registration after opposition. Article 36 of the Chinese Trademark Law 2013 adopts the provision in Paragraph 3, Rule 23 of Implementing Regulations of the Chinese Trademark Law 2001, that is, “the trademark approved for registration in an opposition adjudication shall not have the retroactive effect on another person’s act to use a sign identical with or similarly to the trademark on the same or similar goods from the date the period for trademark opposition expires and before the adjudication on the opposition takes effect; however, the losses inflicted to the trademark registrant due to the bad faith use of the sign shall be compensated. ”
3) Retroactive effect of a registered trademark invalidated. Paragraph 1 and 2 of Article 47 of the Chinese Trademark Law 2013 adopts the provision in Rule 36 of Implementing Regulations of the Chinese Trademark Law 2001, that is, “the exclusive right to use of an invalidated registered trademark shall be deemed to be non-existence from the beginning. Any executed decisions, judgments, settlements by the Court, enforcement of trademark infringement decisions by the AIC, and trademark assignment, license or an agreement to use shall not have retroactive effect. However, in respect of damage done to any other person in bad faith by the trademark registrant, he shall compensate for the said damages.” Further, Paragraph 3 of Article 47 of this Law
71 adds the provision that “where, pursuant to the preceding paragraph, no refund of trademark infringement compensation, trademark assignment fee, trademark royalty, or is obviously contrary to the principle of equity, the whole or part of the fee shall be repaid. ”
4) Effectiveness date of a registered mark cancelled. Article 55 of the Chinese Trademark Law 2013 provides that “the registered mark cancelled will be published by the CTMO, and the exclusive rights thereof will be terminated on the date of publication,” which is modified from the provision in Rule 40 of Implementing Regulations of the Chinese Trademark Law 2001, that is, “the exclusive right in the registered trademarks shall terminate on the date of cancellation decision made by the CTMO.”
9. Administration on trademark use is further strengthened.
9.1 Definition of trademark use is clarified.
The Chinese Trademark Law 2013 adopts the provision in Rule 3 of Implementing Regulations of the Chinese Trademark Law 2001, clarifies the definition of trademark use, and emphasizes the trademark use in the sense of the Chinese Trademark Law with the purpose of “identifying the sources of goods/services.” This is of great guiding significance to handling trademark disputes.
9.2 Legal consequence of improper use and non-use for three consecutive years of the registered marks is clarified.
Paragraph 1, Article 49 of the Chinese Trademark Law 2013 adopts the provision in Paragraph 1, Rule 39 of Implementing Regulations of the Chinese Trademark Law 2001, and clarifies that the local AICs (instead of the CTMO prescribed in the Chinese Trademark Law 2001) have the power to order the rectification of unilaterally altering a registered trademark, name, address, or other registered matters, while the power to cancel the registered trademark remains with the CTMO. This provision confers and increases managerial power to the local AICs. Moreover, Paragraph 1, Article 49 of this new Law adopts the provision in Paragraph 2, Rule 39 of Implementing Regulations of the Chinese Trademark Law 2001, and provides that any person may directly request to cancel a registered mark for non-use for three consecutive years, while the preceding procedure of “rectifying within the specified period” does not apply.
9.3 Amount of the fine imposed by the local AIC is further clarified.
1) For any violation of compulsory requirements of registered trademarks on certain goods/services prescribed by laws and administrative regulations, Article 51 of the Chinese Trademark Law 2013 prescribes the specific amount of the fine.
2) For falsely presenting an unregistered trademark as registered, or using an unregistered trademark violates Article 10 of the Chinese Trademark Law 2013, Article 52 of the Chinese Trademark Law 2013 prescribes the specific amount of the fine.
3) For using the wording “well-known trademark” on commercial activities in violation of Paragraph 5, Article 14 of the Chinese Trademark Law 2013 will be ordered by local AIC to rectify the violation and impose a fine of
72 RMB 100,000 (around US$ 16,200), as prescribed by Article 53 of the Chinese Trademark Law 2013.
9.4 Cancellation against trademark registration of generic terms is adopted.
Paragraph 2, Article 49 of the Chinese Trademark Law 2013 adopts the practice of cancellation against the trademark registration of generic terms. Like the cancellation against the three-year non-use cancellation, any entity is entitled to file cancellation against those registered marks where they have become generic terms.
10. Regulations on trademark agents are enhanced.
1) Article 19 of the Chinese Trademark Law 2013 adds provisions of legal liabilities for trademark agencies, e.g., trademark agencies shall follow the principle of good faith; keep business secrets of the principal in confidence; expressly notify the principal where the principal’s trademark application may fall into circumstances prescribed under this Law that prevent its application from registration; not accept the entrustment if they know or should know that the principal’s trademark application falls into circumstances prescribed under Article 15 and Article 32 of this Law; not register marks beyond the scope of agency services.
2) The Chinese Trademark Law 2013 adds penalties for breach of discipline and violation of laws. Article 20 of this Law adds regulations and penalties for trademark agency organization members. Article 68 of this Law adds penalties for trademark agencies as follows: the AIC shall order it to rectify within a specified period, give a warning, and fine; the person who are directly in charge and other persons who are directly responsible shall be given a warning and fine; in the case of criminal offense, the infringer will be held criminally responsible; the AIC will record any breach and violations into the credit archives; cease trademark agency services, etc.
73 【HOT TOPICS AND TIPS】
Protection for Prior Copyright in Trademark Disputes
Co-author: Mr. Jason WANG, partner at Beijing East IP Law Firm, trademark attorney and PRC Attorney-At-Law, Trademark Law Committee member at the Beijing Bar Association
Co-author: Ms. Fei Fei BIAN, trademark attorney at Beijing East IP Law Firm
I. Prior copyright: an important aspect with various advantages to claim against the trademark at dispute
1. An important aspect to claim prior rights
Copyrighted Work Claimed Disputed Trademark
Disputed Trademark
In the recent practice, the famous carmaker Tesla Motors, Inc. filed two civil lawsuits in China in September 2013 before Beijing Third Intermediate Court, against ZHAN Bao Sheng. ZHAN is the registrant of the disputed trademark of the “TESLA TESLA MOTORS and T Design” in China, where Tesla Motors, Inc. has filed disputed cancellations before the Trademark Review and Adjudication Board (TRAB) as well. In one of the civil lawsuits, Tesla Motors, Inc. claimed its prior copyright of the “T Design.” According to the news report, all the trademark disputes and copyright disputes between Tesla Motors, Inc. and ZHAN have already been settled before Beijing Third Intermediate Court in August 2014.[1] In addition, in the successful disputed cancellations against the disputed trademarks before the TRAB, Tesla Motors, Inc. should have also claimed its prior copyright. Undoubtedly, the claim of prior copyright has become one of the key factors and weapons for Tesla Motors, Inc. to successfully clear its major trademark obstacles to the entry of huge China market.
In fact, according to the Chinese Trademark Law and other regulations as well as practice in China, prior copyright may be a very important aspect to claim against the trademark at dispute in the trademark disputes. Quite a large portion of trademark disputes involves the claim of prior copyright.
With respect to the laws and regulations, the first part of Article 32 of the Chinese Trademark Law 2013 (Article
74 31 of the Chinese Trademark Law 2001) prescribes as follows: “An trademark application for registration shall not create any prejudice to the existing prior right of another person.” The Trademark Adjudication Standard promulgated jointly by the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB) in 2005 has expressly prescribed that the “exiting prior right” includes the copyright, in addition to trade name, design patent, right of name, right of portrait, etc. acquired prior to the application date of the trademark at dispute. In addition, Rule 17 of the Supreme Court Opinions regarding Administrative Cases of Trademark Rights Granting and Determination (Fa Fa〔2010〕12) prescribes as follows: “The summarizing provision of Article 31 of the Chinese Trademark Law 2001, namely, an trademark application for registration shall not create any prejudice to the existing prior right of another person, shall be correctly understood and applied. When examining and determining whether the disputed trademark creates any prejudice to the prior right of another person, the court shall protect the prior rights which are specifically provided under the Chinese Trademark Law pursuant to the specific provisions thereof. Where the Chinese Trademark Law is silent, the legitimate right to be protected pursuant to the General Principles of Chinese Civil Law and other laws and regulations shall be protected pursuant to this summarizing provision. ”
In Tianjin Yi Hong Science and Technology Services Co., Ltd. vs. China ICBC Co., Ltd. vs. the TRAB case regarding the “ICBC Design,” the Supreme Court held in 2012 that if the subject meets the requirements of both the Chinese Trademark Law and the Chinese Copyright Law, such subject may be protected by both laws. [2]
2. Automatic protection without registration
Article 2 of the Chinese Copyright Law prescribes as follows: “Work of Chinese citizens, legal persons or entities without legal personality, whether published or not, shall enjoy copyright in accordance with this Law.” Furthermore, Rule 6 of Implementing Regulations for the Chinese Copyright Law prescribes as follows: “The copyright comes into being on the date of the completion of the work.”
Based on the above laws as well as the practice in China, the protection of copyrighted work is not preconditioned on registration. And the protection of copyrighted work is protected if evidence may establish that the work has been created or published prior to the application date of the trademark at dispute, and the law does not compulsorily require whether it has been registered or not.
Compared with the trademark, the copyright has the advantage of being granted for automatic protection without registration, and such automatic protection is based on creation or publication, not necessarily based on registration. Even if the work has not gone through the registration procedure with the relevant authorities or organizations, it is still possible to prove its ownership and rights through evidence regarding creation or publication of the work. Of course, although the copyright protection is based on creation or publication of the work, not necessarily based on registration, the registration of copyrighted work will definitely facilitate the evidence establishment proving the copyright ownership, which may serve as prima facie evidence.
3. Automatic protection for cross-jurisdiction
75 Article 2 of the Chinese Copyright Law prescribes as follows: “Work of foreigners first published in the territory of China shall enjoy copyright in accordance with this Law. Any work of a foreigner published outside the territory of China which is eligible to enjoy copyright under an agreement concluded between the country to which the foreigner belongs and China, or under an international treaty to which both countries are parties, shall be protected in accordance with this Law.”
According to the Chinese Copyright Law as well as the Berne Convention, work published either in China or U.S. or any other contracting members of the Berne Convention will be automatically protected. Obviously, the characteristic of cross-jurisdiction for the copyrighted work is an advantage for the rights owner, compared with the trademark which is greatly limited to jurisdiction.
4. Strong protection for cross-Class
The protection of prior copyright breaks through the limitation imposed by the Classification of Similar Goods and Services promulgated by the CTMO based on the Nice Classification. Theoretically speaking, cross-Class protection granted to the copyrighted work may be extended to all the 45 Classes, which is even broader than the protection scope of the well-known trademark. In addition, Chinese authorities (the CTMO, the TRAB, and the courts) impose very strict requirements on the well-known trademark recognition, and the trademark right owners bear a very heavy burden of proof to establish that their trademarks have achieved the well-known status in China.
Of course, protection for prior copyright in trademark dispute cases is a controversial topic both academically and in legal practice. But currently, the prevailing view and practice in China is that the copyright protection may be granted for cross-Class protection with little limitation. Compared with the well-known trademark, the claim of prior copyright seems more helpful to protect the owner’s rights and more feasible to crack down on the bad faith trademark filing.
II. Key issues and factors to be considered
In the Ritz-Carlton Hotel Company, L.L.C. vs. Shi Shi City Bao Hu Nan Hua Daily Necessities Store vs. the TRAB case regarding the “Lion and Crown Design,” both Beijing First Intermediate Court (the first instance court) and Beijing High Court (the second instance court) reversed the TRAB decision, and the courts recognized that the Ritz-Carlton Hotel Company, L.L.C. owned prior copyright on its “Lion and Crown Design,” and thus the application of the disputed trademark violated Article 31 of the Chinese Trademark Law 2001 (Article 32 of the Chinese Trademark Law 2013).[3] This case may be very typical to reflect the usual way how the courts recognize the prior copyrighted work and to reflect factors the courts take into consideration, to grant protection for prior copyright in the trademark dispute cases. Specifically, Beijing First Intermediate Court held that the following conditions should be met when determining the infringement upon the prior copyright: (1) The subject matter claiming for copyright protection should be the copyrighted work in the sense of the Chinese Copyright Law; (2) The copyrighted work is still in the period of protection; (3) The applicant or registrant of the disputed trademark has the possibility of having access to the copyrighted work; (4) The disputed trademark
76 constitutes substantially similar to the copyrighted work; (5) The creation of the copyrighted work is prior to the application date of the disputed trademark.
Copyrighted Work Disputed Trademark
Based on the facts ascertained, the court held as follows:
First, the “Lion and Crown Design” claimed by the Ritz-Carlton Hotel Company, L.L.C. is an artistic expression to the lion head, which is distinctive, and can be duplicated. Thus, the “Lion and Crown Design” falls under scope of copyrighted work protected by the Chinese Copyright Law. Meanwhile, such work is still in the period of protection.
Second, according to the facts ascertained by the court, prior to the application date of the disputed trademark, the trademarks containing the copyrighted work have been approved for registration and published in other countries and regions. In the absence of evidence to the contrary, it is reasonable to presume that the registrant of the disputed trademark may have access to such copyrighted work.
Third, the design part contained in the disputed trademark is identical to the copyrighted work owned by the Ritz-Carlton Hotel Company, L.L.C., and the creation date of such work is earlier than the application date of the disputed trademark.
As for the CTMO and TRAB, the practice and rules are similar to the courts. Rule 3.2 (Application Requirements) of the Trademark Adjudication Standard prescribes as follows: (1) The trademark at dispute is identical or substantially similar to the prior copyrighted work. (2) The applicant/registrant of the trademark at dispute had access or has the possibility of having access to the copyrighted work owned by others. (3) The application for registration of the trademark at dispute is not authorized by the copyright owner.
Based on the above regulations and the practice in China, the key issues related to the prior copyright protection in the disputes concerning design trademarks may be as follows: (1) Originality standard of recognizing a sign as the copyrighted work; (2) Evidence proving the ownership including prior creation date and/or publication date of the copyrighted work; (3) Similarity between the copyrighted work and the trademark at dispute; (4) Evidence proving the applicant/registrant of the trademark at dispute has the possibility of having access to the copyrighted work. The later section of this article will analyze the four key issues separately.
Ⅲ. First issue: Originality standard of recognizing a sign as the copyrighted work
77 Rule 21 of Beijing High Court Guidelines for Trial of Administrative Cases concerning Trademark Right Granting and Determination promulgated in January 2014 prescribe as follows: “It shall be determined in accordance with the Chinese Copyright Law, on whether a trademark sign constitutes a work.” Therefore, the key issue to recognize a sign as the copyrighted work is the originality. Below are some of the typical cases.
(1) SANYO and N Design
Cited Prior Trademark Opposed Trademark
Copyrighted Work
In Sanyo Electronic Co. Ltd. vs. Chengdu Ling Linto Industrial Co., Ltd. vs. the TRAB case regarding the “SANYO and N Design,” both the TRAB and the Beijing First Intermediate Court held that the cited prior trademark of “SANYO and N Design” in its entirety is not confusingly similar to the opposed trademark of “LINTO and N Design.” However, the Beijing First Intermediate Court reversed the TRAB decision, and held that the “N Design” contained in the “SANYO and N Design” is copyrighted work and recognized Sanyo Electronic Co. Ltd. owned prior copyright on the “N Design,” and rejected the registration for the opposed trademark based on that ground.[4]
(2) CAMEL (stylized)
Copyrighted Work Opposed Trademark
In Japan Tobacco Inc. vs. WAN Jin Gang vs. the TRAB case regarding the “CAMEL (stylized)” sign, the Beijing High Court held the view that the “CAMEL (stylized)” sign claimed by Japan Tobacco Inc. is copyrighted work according to the Chinese Copyright Law, based on the following grounds: First, there is no evidence proving that the “CAMEL (stylized)” sign is in block letter. Second, those English letters bear distinctive characteristics and are arranged in the form of an arch. Here, Beijing High Court held a view different from the Beijing First Intermediate Court and the TRAB on the originality of the “CAMEL (stylized)” sign. Of course, the Beijing High Court did not support the copyright claims of Japan Tobacco Inc. based on the ground that Japan Tobacco Inc. failed to submit the evidence showing the ownership of such “CAMEL (stylized)” sign.[5]
In addition, the Beijing High Court held the view that the standard on originality for the copyrighted work shall not be too high, which is opposite to the view of the Beijing First Intermediate Court in this specific case. The Beijing High Court also held the view that the granting of protection for copyrighted work will not adversely affect the trademark law system. Furthermore, the logic behind the specific judgment rendered by the Beijing
78 High Court is as follows: The higher the degree where the signs are identical or confusingly similar, the lower requirement on originality is imposed.
(3) B Design
Copyrighted Work Disputed Trademark
In Foshan City Shunde District Ming Bang Chemical Industrial Co., Ltd. vs. Bridgestone Corporation vs. the TRAB case regarding the “B Design,” the TRAB, the Beijing First Intermediate Court and the Beijing High Court all held that the “B Design” has certain originality and is copyrighted work.[6]
(4) FJ Design
Copyrighted Work Disputed Trademark
In Ningbo Fu Jia Electron Electrical Appliances Co., Ltd. vs. Ningbo Fu Da Share Stock Co., Ltd. vs. the TRAB case regarding the “FJ Design,” the TRAB and the Beijing High Court both held the view that the design contained in the “FJ Design” is copyrighted work.[7]
(5) Kievit and Bird Design
Copyrighted Work Opposed Trademark
In Shantou City Longhu District Jin He Food Industry Co., Ltd. vs. Friesland Brands B.V. vs. the TRAB case regarding the “Kievit and Bird Design,” the TRAB, the Beijing First Intermediate Court, and the Beijing High Court all held that the “Kievit and Bird Design” is copyrighted work, specifically: Admittedly, the design of kiwi bird is the depicture of the bird species in nature, and “Kievit” is the commonly known name for kiwi bird. However, the design of kiwi bird has established its originality despite of the simple technique of expression thereof. In addition, while being the common name of one specific bird, the word “Kievit” is also the family name of the founder of Zuivelfabriek De Kievit B.V. (former entity of Friesland Brands B.V.) and the trade name of Zuivelfabriek De Kievit B.V. The design of kiwi bird and the artistic calligraphy of Keivit are combined to constitute a complete work which should be protected by the laws.[8]
(6) Sollatek (stylized)
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Copyrighted Work Claimed Disputed Trademark
In Wenzhou Tian Shi Electronic Appliance Co., Ltd. vs. Sollatek (U.K.) Limited vs. the TRAB case regarding the “Sollatek (stylized)” sign, both the Beijing First Intermediate Court and the Beijing High Court reversed the TRAB decision, and held that the “Sollatek (stylized)” sign is not copyrighted work.[9]
(7) Ettusais and Ettusais in Chinese (handwriting)
Copyrighted Work Claimed Opposed Trademark
In Shiseido Co., Ltd. HONG Wei Hong vs. the TRAB case regarding the “Ettusais and Ettusais in Chinese (handwriting)” sign, the Beijing First Intermediate Court held that neither “Ettusais (handwriting)” nor “Ettusais in Chinese (handwriting)” is copyrighted work, because they are not different from the commonly used handwriting.[10]
(8) Tim Hortons (handwriting)
Copyrighted Work Claimed Opposed Trademark
In Tim Hortons International S. A. vs. Jinjiang Da Sen Clothing Co., Ltd. vs. the TRAB case regarding the “Tim Hortons (handwriting)” sign, the TRAB, the Beijing First Intermediate Court and the Beijing High Court all held the view that the English letters “Tim Hortons” (handwriting) are not copyrighted work as they lacked the originality. [11]
(9) és (stylized)
Cited Trademark Opposed Trademark
In Pierre-Andre SENIZERGUES vs. Shenzhen Mei Te Trading Co., Ltd. vs. the TRAB case regarding the “és (stylized)” sign, the TRAB, the Beijing First Intermediate Court and the Beijing High Court all held the “és” sign does not constitute copyrighted work, as the form thereof is quite simple, although they are not in block letter.[12]
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(10) Wei Long in Chinese and Wei Long (stylized)
Copyrighted Work Claimed Opposed Trademark
In Ping Ping Food LLC of Luohe City vs. HUANG Jin Zhong and the TRAB case regarding the “Wei Long in Chinese and Wei Long (stylized)” sign, both the Beijing First Intermediate Court and the Beijing High Court reversed the TRAB decision, and held that the “Wei Long in Chinese and Wei Long (stylized)” sign is not copyrighted work.[13]
Ⅳ. Second issue: Evidence proving the ownership including prior creation date and/or publication date of the copyrighted work
First, there are different types of evidence proving the ownership of the copyrighted work. Article 11(4) of the Chinese Copyright Law prescribes as follows: “If no proof to the contrary is available, the citizen, legal person or other organization whose name affixed to a work shall be the author.” Rule 7 of the Supreme People’s Court Interpretations on Several Issues Relating to Application of Law to Trial of Civil Dispute Cases of Copyright prescribes as follows: “Documents concerning copyright, such as manuscript, original copy, legitimate publication, copyright registration certificate, certification issued by certifying organization or agreement regarding ownership, can serve as evidence of copyright.” Rule 22 of the Beijing High Court Guidelines for Trial of Administrative Cases concerning Trademark Right Granting and Determination prescribes as follows: “Design manuscript of the trademark sign, copyright registration certificate, entrustment agreement of trademark sign design, copyright assignment agreement can be used as prima facie evidence to determine the copyright ownership on the trademark sign.”
Second, evidence proving the prior creation date and/or publication date of the copyrighted work is also crucial. Rule 17 of the Supreme Court Opinions regarding Administrative Cases of Trademark Rights Granting and Determination (Fa Fa〔2010〕12) prescribes as follows: “When adjudicating on whether the trademark at dispute creates prejudice to the existing prior right of another person, the court usually refers to the application date of the trademark at dispute.”
In practice, evidence proving the copyright ownership including prior creation date and/or publication date of the copyrighted work may be mainly as follows:
1. Copyright registration certificate: prima facie evidence
Under Chinese laws and practice, the copyright of the work registered in either U.S. or China or any other contracting members of the Berne Convention may be used as prima facie evidence of the copyright ownership.
81 On the one hand, according to the practice, if the issuance date of the copyright registration date is earlier than the application date of the trademark at dispute, credibility of such copyright registration certificate as evidence should be strong. If the issuance date thereof is later than the application date of the trademark at dispute or even later than the filing date of the opposition or invalidation, credibility will be lowered, and such copyright registration certificate alone may probably not be sufficient to prove the copyright ownership. For example, Rule 23 of the Beijing High Court Guidelines for Trial of Administrative Cases concerning Trademark Right Granting and Determination promulgated in January 2014 prescribes as follows: “Copyright registration certificate alone obtained after the filing date of a trademark opposition or invalidation application is insufficient to prove the ownership of the copyright of such work.” In this situation, in order to establish the copyright ownership, the copyright registration certificate shall usually be combined with other evidence such as prior trademark registration certificate, entrustment agreement or assignment agreement proving the copyrighted work has been created or published prior to the application date of the trademark at dispute.
In the above “Lion and Crown Design” case, the Ritz-Carlton Hotel Company, L.L.C. has submitted, among those evidence such as prior trademark registration certificates, the photocopy of copyright registration certificate of the “Lion and Crown Design” issued on February 19, 1998 by U.S. Copyright Office, indicating the work is created in 1992 and owned by the Ritz-Carlton Hotel Company, L.L.C. Both the issuance date of the copyright registration certificate and the creation date of the work are earlier than the application date (August 14, 2001) of the disputed trademark. However, the TRAB refused to recognize the Ritz-Carlton Hotel Company, L.L.C. as the copyright owner, based on the ground that such copyright registration certificate is a photocopy without notarization and legalization required by the Chinese laws. During the first instance proceeding, the Ritz-Carlton Hotel Company, L.L.C. supplemented the notarized and legalized copyright registration certificate. Both the Beijing First Intermediate Court and the Beijing High Court accepted such newly submitted evidence, and held that the Ritz-Carlton Hotel Company, L.L.C. owns the prior copyright on the work based on that evidence, in the absence of no other evidence to the contrary. Here, please note that the registration date for the copyright registration is earlier than the application date of the disputed trademark, not to mention the filing date of the disputed cancellation.
On the other hand, if the adversary presents the evidence to the contrary, or the information indicated on the copyright registration certificate exists substantial or reasonable doubts, ambiguity, or inconstancy, then the credibility of the copyright registration will be lowered, or such evidence will be discredited.
In the above “és (stylized)” case, both parties at dispute have submitted, during the first instance proceeding, copyright registration certificates issued by the Chinese Copyright Office for the same sign. The opponent Pierre-Andre SENIZERGUES submitted the copyright registration certificate issued on September 28, 2010 claiming the work is created by the opponent on February 1, 1995 in U.S., which is later than the application date (December 13, 2001) of the opposed trademark. In addition, the opposed party Shenzhen Mei Te Trading Co., Ltd. also submitted the copyright registration certificate issued on October 26, 2010, claiming the work is created on March 1, 1994 by a Chinese individual. In this situation, the court held that even if the sign
82 constituted copyrighted work, it would be difficult to judge on the ownership in the absence of other relevant evidence.
2. Prior trademark registration certificate alone: different views on the credibility
Prior trademark registration certificate is the most frequently submitted evidence to prove the copyright ownership, no matter the trademark registration certificate is submitted alone or combined with the other evidence, because prior trademark registration certificate may be the easiest and convenient way to collect the evidence. Prior trademark registrations of the work can be used as supplementary evidence to prove the registrant is the copyright owner when used together with other evidence.
As for the prior trademark registrant certificate alone, there are different views and the practice of Chinese authorities changed during different periods.
At the early stage in around 2005, courts started to recognize the copyright ownership directly and solely based on the prior trademark registration certificate. For example, in Shanghai U. B. C. Coffee Food Co., Ltd. vs. CHEN Wen Min and Hangzhou U. B. C. Coffee Food Co., Ltd. case regarding the “U. B. C Coffee and Design”, Beijing High Court recognized the copyright ownership based on the trademark registration certificate alone.[14]
Disputed Trademark
However, since around end of 2009, courts started to deny the practice of recognizing the copyright ownership directly and solely based on the prior trademark registration certificate.
For example, in Fujian Shi Shi City Lao Ren Cheng Clothing Co., Ltd. vs. Hua Yuan Company vs. the TRAB case regarding the “Leonardo da Vinci portrait,” the TRAB and the Beijing First Intermediate Court held that Hua Yuan Company owns the prior copyright, based on its prior trademark registration and trademark gazette. However, the Beijing High Court reversed the decisions of the TRAB and the Beijing First Intermediate Court in December 2009. Beijing High Court held as follows: The information indicated on the trademark registration certificate and trademark gazette merely indicates the ownership of the trademark, and it is not the act of indicating the copyright ownership in the sense of the Chinese Copyright Law. Thus, prior trademark registration and trademark gazette is not sufficient to prove the copyright ownership.[15]
Cited Trademark Opposed Trademark
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In Caramelo, S.A. vs. Guangzhou CANUDILO Clothing Inc. vs. the TRAB case regarding the “Ka Nu Di Lu in Chinese and CANUDILO and Design,” both the Beijing First Intermediate Court and the Beijing High Court held in 2010 and 2011 respectively as follows: Trademark registration certificate itself is not sufficient to prove the trademark registrant is necessarily the owner of the copyrighted work contained in the trademark registration. “Signature” prescribed in Article 11(4) of the Chinese Copyright Law refers to the signature that indicates the identity of the author, conveying the denotation to the public that the signatory is the creator of the work. The information in relation to the trademark registrant indicated in the application for trademark registration and corresponding gazette only manifests the ownership of the right to the registered trademark, and shall not be the signaturing behavior which indicates the identity of the author of the work in light of the Chinese Copyright Law.[16]
Cited Trademark Opposed Trademark
In the above “Ettusais and Ettusais in Chinese (handwriting)” case, the Beijing First Intermediate Court held in 2012 as follows: The trademark registration certificate itself is not sufficient to prove the trademark registrant is necessarily the owner of the copyrighted work contained in the trademark registration. Other evidence such as evidence produced in the process of creating the copyrighted work, evidence proving the publication of the work, assignment agreement, etc. shall be provided.
3. Prior publication and/or use of the work: an important aspect
Prior publication and/or use of the work is also an important aspect to prove the copyright ownership.
(1) Kievit and Bird Design
In the above “Kievit and Bird Design” case, the court ascertained the following facts: Zuivelfabriek De Kievit B.V. (former entity of the opponent Friesland Brands B.V.) designed a new commercial sign of “Kievit Bird Design and the artistic calligraphy of Keivit” in 1991. In 1994, Zuivelfabriek De Kievit B.V. compiled and published the publicity materials “The present lies in the past (1894－1994),” in order to commemorate the 100th anniversary of the company, and the “Kievit Bird Design and the artistic calligraphy of Keivit” sign has been labeled in various places in the picture album. On March 4 to 6, 1996, Zuivelfabriek De Kievit B.V. attended the Food Ingredients Asia held in Hong Kong, and unveiled its “Kievit Bird Design and the artistic calligraphy of Keivit” sign and products. The court held that evidence on hand in this case is sufficient to prove the opponent Friesland Brands B.V. enjoys the prior copyright on the work of “Kievit Bird Design and the artistic calligraphy of Keivit.”
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(2) Double Fish and Waved Lines
Copyrighted Work Opposed Trademark
In South Sea Fishing Village Co., Ltd. vs. Zhejiang Shao Bing Co., Ltd. vs. the TRAB case regarding the “Double Fish and Waved Lines” sign, South Sea Fishing Village Co., Ltd. submitted the copyright registration certificate issued on May 25, 2006 (later than April 30, 2004, the application date of the opposed trademark) of the “Double Fish and Waved Lines” sign indicating the work is created on February 15, 1992 and published on August 20, 1992. During the first instance proceeding, South Sea Fishing Village Co., Ltd. further supplemented advertisement published by Guangzhou Daily dated February 18, 1987 which indicating South Sea Fishing Village Seafood Restaurant instead of South Sea Fishing Village Co., Ltd. as the user of the “Double Fish and Waved Lines” sign. The Beijing First Intermediate Court refused to recognize its prior copyright based on the following grounds: First, the publication date (1987) of the advertisement is even earlier than the creation date (1992) shown on the copyright registration certificate. Second, no evidence is submitted to prove the relationship between South Sea Fishing Village Seafood Restaurant and South Sea Fishing Village Co., Ltd. During the second instance proceeding, South Sea Fishing Village Co., Ltd. further submitted the evidence proving South Sea Fishing Village Seafood Restaurant is the predecessor of South Sea Fishing Village Co., Ltd. Based on the new evidence, the Beijing High Court reversed the judgment of the Beijing First Intermediate Court and held as follows: Although the copyright registration certificate flawed in the creation date and publication date of the sign, the fact that South Sea Fishing Village has been using the sign and registered the sign as trademark can prove its prior copyright ownership. [17]
(3) ALEPH Design
Copyrighted Work Opposed Trademark
In Aleph Electronics (Shen Zhen) Co., Ltd. vs. WU Jian Gang vs. the TRAB case regarding the “ALEPH Design,” the Beijing First Intermediate Court ascertained the following facts: The company badge of Nippon Aleph (affiliated with Aleph Electronics (Shen Zhen) Co., Ltd.) associated with “NIPPON ALEPH” is published on Electronic Components Industry Guide dated September 26, 1984, which is prior to the application date (June 3, 1996) of the opposed trademark. The design part on the company badge published is exactly identical to trademark registration of Nippon Aleph in Japan. In addition, Nippon Aleph claims its copyright and trademark right regarding the work on Nikkan Kogyo dated November 9, 2010 and Yomiuri Shimbun dated November 12, 2010 after the application of the opposed trademark. Besides, Aleph Electronics (Shen Zhen) Co., Ltd. has also submitted the trademark registration certificate in Japan and copyright registration certificate. Therefore, both
85 the Beijing First Intermediate Court and the Beijing High Court reversed the TRAB decision, and held that evidence submitted has formed a completed chain of evidence and Nippon Aleph’s prior copyright on the work is established.[18]
4. Affidavit of the relevant entities: supplementary evidence
The relevant entities such as the previous copyright owner in the assignment agreement, the employee or designer in the service invention or entrustment agreement regarding the copyrighted work may issue an affidavit to testify its knowledge about the copyright ownership and/or process regarding creation of the work. However, since those relevant entities may be deemed as interested party closely related to the copyright claimant, the evidentiary effects are limited. And the affidavit usually can only be used as supplementary evidence, in support of other evidence such as photocopy of the entrustment agreement or assignment agreement while the original agreement is absent. In addition, written affidavit signed by those relevant entities alone is not sufficient. Instead, such affidavit needs to meet the credibility requirements as evidence. If the affidavit is made in China, it should be notarized with witness of two notary publics in China, to ensure its credibility as evidence. If the affidavit is made outside of China, then it shall be notarized by the local notary public and then legalized by the Chinese embassy or consulates in that region.
In the above “FJ Design” case, the Beijing First Intermediate Court reversed the TRAB decision, and held that photocopy of the entrustment agreement of the sign and the manuscript of sign are not sufficient to prove the copyright ownership. During the second instance proceeding, Ningbo Fu Jia Electron Electrical Appliances Co., Ltd. supplemented a notarized written affidavit of the designer as one contracting party of the entrustment agreement, describing the process of the design and expressly declaring that Ningbo Fu Jia Electron Electrical Appliances Co., Ltd. owns the copyright on the sign. Based on the new evidence submitted, the Beijing High Court held that evidence submitted by Ningbo Fu Jia Electron Electrical Appliances Co., Ltd. is sufficient to prove its ownership on the copyrighted work.
5. Effective decisions confirming the copyright ownership: acceptable as a principle but not acceptable as exceptions
According to Item (4), Paragraph 1, Rule 9 of Provisions of the Supreme People’s Court on Evidence in Civil Proceedings, for any of the following facts, a party concerned shall be exempt from the burden of proof: (4) A fact confirmed by legally effective ruling of the people's court. Of course, Paragraph 2, Rule 9 thereof prescribes that Item (4) of Paragraph 1 thereof shall not apply if a party concerned produces evidence to the contrary to repudiate the fact mentioned therein. Rule 3.3 of the Trademark Adjudication Standard promulgated jointly by the CTMO and TRAB in 2005 prescribes as follows: “In the absence of evidence to the contrary, the facts confirmed in the effective decisions that the interested party enjoys prior copyright may be accepted.”
Based on the above regulations and rules, the effective decisions in other cases confirming the copyright ownership will usually serve as evidence or at least as one aspect to prove the ownership on the copyright. However, there are some exceptions, or some other evidential requirements are imposed. The two cases below remind us of the importance of fully meeting the evidential requirements prescribed by the Chinese laws, even if
86 there is a prior decision confirming the copyright ownership.
(1) Ultraman (China Courts 2013 Top 10 IP Case)
In Sompote Saengduenchai and Chaiyo Productions Co，Ltd vs. Tsuburaya Productions Co，Ltd, etc. copyright infringement case regarding “Ultraman,” courts in Japan and Thailand have already rendered final judgments on effectiveness of the copyright license agreement, which is the key to determine the copyright ownership in the case at dispute in China. Japanese courts held the copyright license agreement is genuine and effective, while Thailand courts held the copyright license agreement is not genuine and effective. Both Guangdong High Court (the second instance court) and the Supreme Court (the retrial court) held the view that the two court decisions in Japan and Thailand failed to go through the legal procedure to acknowledge and accept its legal binding effect according to the Chinese Civil Procedural Law. According to the law, application for acknowledging and accepting the legal and binding effect of a final decision rendered by a foreign court shall go to the competent Intermediate Court in China, instead of the High Court or the Supreme Court directly, due to jurisdiction issue. Thus, the acknowledgment of legal and binding effect has gone beyond of the jurisdiction of the Guangdong High Court and the Supreme Court. Accordingly, those two court decisions in Japan and Thailand do not have legal effect in China and do not have binding effect on Chinese courts. Instead, the Guangdong High Court and the Supreme Court recognized that the copyright license agreement at dispute has legal effect based on other aspects of facts ascertained.[19]
This case ranked as one of China Courts 2013 Top 10 IP Cases. According to this specific case, a final court decision is not necessarily sufficient to prove the copyright ownership. The final decisions regarding the copyright ownership rendered by foreign courts shall go through the necessary legal procedure of acknowledging and accepting its legal and binding effect before the competent Chinese Intermediate Court prescribed by Chinese laws.
(2) Wei Long in Chinese and Wei Long (stylized)
In the above “Wei Long in Chinese and Wei Long (stylized)” case, evidence submitted by the cancellation petitioner HUANG Jin Zhong to the TRAB included the copyright registration certificate issued by the Chinese Copyright Office, photocopies of documentary materials archived at Health Bureau of Cangnan County, and the civil judgment of the Chaozhou City Intermediate Court of Guangdong Province. The TRAB held as follows: The facts ascertained by effective court judgments shall be directly affirmed, in the absence of evidence to the contrary which is sufficient to reverse the facts. In accordance with the facts ascertained by the effective civil judgment of the Chaozhou City Intermediate Court, HUANG Jin Zhong enjoyed the copyright on the “WEI LONG in Chinese and Wei Long (stylized)” design, and the date acquiring the copyright is March 11, 2002, which is earlier than the application date (December 29, 2003) of the disputed trademark as well as the creation date (November 18, 2003) claimed by Ping Ping Food LLC for its own work. Therefore, HUANG Jin Zhong enjoyed the prior copyright on the work of “WEI LONG in Chinese and Wei Long (stylized).”
However, the Beijing First Intermediate Court held as follows: The fact that HUANG Jin Zhong enjoyed the copyright on the “WEI LONG in Chinese and Wei Long (stylized)” sign was affirmed by the civil judgment of the Chaozhou City Intermediate Court, on the basis that HUANG Wen Jian, the defendant thereof, had no objection against the authenticity of all the evidence, including the photocopies of documentary materials
87 archived at Health Bureau of Cangnan County submitted by HUANG Jin Zhong. Thus, the affirmation shall be specific only to that civil case. That affirmed fact directly affects the substantial right of Ping Ping Food LLC as Ping Ping Food LLC is an interested party of said affirmed fact. In the circumstance that Ping Ping Food LLC does not accept the authenticity of the evidence based on which the fact was affirmed, and that there is no sufficient proof to prove said evidence is authentic and effective, the affirmed fact does not necessarily have legal binding effect on Ping Ping Food LLC.
One of the key issues in the above case is that the copyright claimant failed to present the original copy of the key evidence, namely, documentary materials archived at Health Bureau of Cangnan County. And the claimant failed to submit any other evidence. Another important factor in this case is that both the Beijing First Intermediate Court and the Beijing High Court held the view that the “WEI LONG in Chinese and Wei Long (stylized)” sign is not copyrighted work. In fact, unlike the Beijing First Intermediate Court, the Beijing High Court did not comment on the ownership issue or evidence issue at all. Instead, the Beijing High Court merely focused on the analysis that the “WEI LONG in Chinese and Wei Long (stylized)” sign is not copyrighted work, and thus sustained the judgment of the Beijing First Intermediate Court based on that ground.
6. Comprehensive evidence with completed chain: best case scenario with strongest credibility
In order to better prove the copyright ownership, combination of the evidence may be the best case scenario, which including the following: evidence concerning the design process of the work, effective judgment confirming the copyright ownership, entrustment agreement regarding the creation of the work, assignment agreement regarding the assignment of the work, copyright registration certificate, prior trademark registration certificate, and any other evidence which can prove the copyright ownership. In the first three cases below, the following combination of evidence is deemed as sufficient to prove the copyright ownership: trademark registration certificate earlier than the application date of the trademark at dispute, combined together with the copyright registration certificate or assignment agreement later than the application date thereof. In the fourth case below, the Beijing High Court presumed that the claimant is the copyright owner, based on the following combination of evidence: trademark registration certificate earlier than the application date of the trademark at dispute, combined together with the article of incorporation stipulating the intellectual property ownership including trademark and copyright.
(1) SANYO and N Design
In the above “SANYO and N Design” case, the Beijing First Intermediate Court recognized the opponent Sanyo Electronic Co. Ltd. owns the prior copyright, based on the following grounds and facts: First, Sanyo Electronic Co. Ltd. submitted the entrustment agreement regarding the creation of the work of “SANYO and N Design” during the opposition proceeding. Second, Sanyo Electronic Co. Ltd. supplemented the copyright registration certificate, which is issued in 2006 by the Chinese Copyright Office, during the first instance proceeding, and the TRAB has no doubt on the credibility of such evidence. Third, the copyrighted work is the design contained in the trademark registration (Registration No. 1012496) in Japan owned by Sanyo Electronic Co. Ltd., and both the application date (December 26, 1995) and registration date (May 21, 1997) of such prior trademark registration in Japan are earlier than the application date (May 30, 1997) of the opposed trademark.
(2) B Design
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In the above “B Design” case, the TRAB, the Beijing First Intermediate Court and the Beijing High Court all held as follows: Although the copyright registration certificate and the copyright assignment agreement are formed later than the date when Bridgestone Corporation filed the cancellation against the disputed trademark, said copyright registration certificate and the copyright assignment agreement indicate that PAOS Corporation completed the creation of the “B Design” on August 2, 1983, and assigned the copyright thereof to Bridgestone Corporation. In addition, Bridgestone Corporation filed the trademark application of the “B Design” in 1983. This fact indicates that Bridgestone Corporation owns the rights and interests on the “B Design” prior to the application date of the disputed trademark, which also verifies the fact proved by a series of evidence such as the copyright registration certificate. Therefore, the trademark registration certificate, copyright registration certificate and copyright assignment agreement have formed a complete chain of evidence, which may prove that Bridgestone Corporation owns the prior copyright of the “B Design.”
(3) KP and Mimi Design
In Knit Planner Co., Ltd. vs. SONG Yi vs. the TRAB case regarding the “KP and Mimi Design,” both the Beijing First Intermediate Court and the Beijing High Court reversed the TRAB decision, and the courts held as follows: Knit Planner Co., Ltd. has submitted the copyright registration certificate filed in Japan on January 1, 2010, to prove that the work entitled “mimi” was first published on August 1, 2000, and the author is indicated as “Knit Planner Co., Ltd.” In addition, the trademark registration certificate for the “KP KIDS’ STUFF BY KNIT PLANNER and Design” (Registration No. 4629708) in Japan may further prove that the design contained in such trademark registration has been formed as of at least April 12, 2002 (application date of the above trademark registration in Japan). Therefore, in the absence of any evidence to the contrary, the evidence submitted by Knit Planner Co., Ltd. has formed a complete chain of evidence, which may establish that Knit Planner Co., Ltd. owns the copyright on the work entitled “mimi” indicated in the copyright registration certificate.[20]
(4) CHICAGO BULLS and Bulls Design (color designed)
In NBA Properties, Inc. vs. CHEN Yu Can vs. the TRAB case regarding the “CHICAGO BULLS and Bulls Design (color designed),” both the TRAB and the Beijing First Intermediate Court held that the trademark registration certificate alone is insufficient to prove copyright ownership. However, the Beijing High Court made further presumption regarding the copyright ownership based on other evidence such as articles of incorporation. Specifically, the Beijing High Court held as follows: It is generally known that Chicago Bulls is one club of NBA. The article of incorporation provided by NBA Properties, Inc. to the TRAB serves as preliminary evidence proving its rights on service design, trademark, trade name, copyright of its club members. Moreover, the cited trademark is identical to the prior copyrighted work of “Bulls Design”; and the application date of the cited trademark is earlier than that of the opposed trademark, which may prove the creation date of work of “Bulls Design” is earlier than the application date of the opposed trademark. The above evidence may preliminarily prove that NBA Properties, Inc. is the owner of the copyrighted work. In the absence of evidence to the contrary, this court presume that NBA Properties, Inc. is the owner of the copyrighted work of the “Bulls Design”.[21]
Ⅴ. Third issue: Similarity between the copyrighted work and the trademark at dispute
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Below are three cases where the trademark at dispute is deemed as substantially similar to the copyrighted work.
(1) ICBC Design
Copyrighted Work Opposed Trademark
In the above “ICBC Design” case, the TRAB, the Beijing First Intermediate Court and Beijing High Court all held as follows: The opposed trademark is an imitation of the copyrighted work, as the opposed trademark may be deemed as 90 degree rotation clockwise of the copyrighted work. Thus, the trademark at dispute is deemed as substantially similar to the copyrighted work. The Supreme Court as the retrial court affirmed the decisions of Beijing First Intermediate Court and the Beijing High Court.[22]
(2) CHICAGO BULLS and Bulls Design (color designed)
Cited Trademark Opposed Trademark
In the above “CHICAGO BULLS and Bulls Design (color designed)” case, the Beijing High Court held as follows: Although the opposed trademark contains the word “Hua Xin in Chinese”, the design part occupies relatively large portion, and such design is extremely similar to the copyrighted work owned by the opponent NBA Properties, Inc. in terms of mode of composition, technique of expression, and overall effect, and has constituted substantially similar.
(3) KP and Mimi Design
Copyrighted Work Disputed Trademark
In the above “KP and Mimi Design,” both the Beijing First Intermediate Court and the Beijing High Court held that the disputed trademark constituted substantially similar to the copyrighted work.
Ⅵ. Forth issue: Evidence proving the applicant/registrant of the trademark at dispute has the possibility
90 of having access to the copyrighted work
Usually, in order to prove the applicant/registrant of the trademark at dispute has the possibility of having access to the copyrighted work, the following aspects may be argued and evidence may be presented.
(1) Originality of the work. The copyright owner may argue the copyrighted work is of strong originality. In the absence of reasonable explanations and/or evidence to the contrary to be presented by the adversary, the courts will usually accept the arguments of the copyright owner.
(2) Long term use and fame of the work. The actual use of the copyrighted work and the trademark contains such copyrighted work may be used to establish that the applicant/registrant of the trademark at dispute should have access to such copyrighted work. For example, in the above “ICBC Design” case, both the TRAB and the court held as follows: As of the creation and use of such copyrighted work in 1989, such design has been used and promoted by China ICBC Co., Ltd. for a long time, thus, Tianjin Yi Hong Science and Technology Services Co., Ltd. should have known and approached the design.
(3) Business relationship. The evidence proving that the applicant/registrant of the trademark at dispute has business relationship such as contract relationship, employment relationship and shareholder relationship may be used to establish that the applicant/registrant of the trademark at dispute should have access to such copyrighted work.
In addition, the issue regarding evidence proving the applicant/registrant of the trademark at dispute has the possibility of having access to the copyrighted work may be related to the protection scope of the copyrighted work, when such protection expanded to different Classes.
Ⅶ. Suggestion
In order to better claim the prior copyright, at least the following evidence collection and evidence preservation are recommended:
(1) Preserve the materials generated during the creation of the work, such as manuscripts showing the author and the date;
(2) Register the copyrighted work with relevant copyright authorities and obtain a copyright registration certificate shortly after the creation of the work;
(3) File the trademark application for registration if the copyrighted work meets the requirements of trademark registration as well;
(4) Well design and preserve the entrustment agreement, assignment agreement, and employment agreement regarding service invention or work for hire, which shall expressly stipulate the copyright ownership;
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(5) While using the work, especially for the first publication, mark the copyright symbol © and make the copyright statement correctly by indicating the author and date on the publications such as magazines, newspapers, and other media;
(6) Preserve the evidence regarding the publicity material, advertisements, and use;
(7) Collect evidence proving use of the trademark and the copyrighted work, and trademark registration certificates;
(8) Obtain and provide evidence like witness, affidavit, declaration from the relevant entities to support and strength the credibility of other evidence;
(9) Collect favorable effective judgments confirming the ownership on the prior copyright around the world and/or by other Chinese authorities; and
(10) Meet the requirements on the form and credibility of the evidence required by the Chinese laws and practice, such as the original copy, notarized and legalized copy, and English translation, and go through appropriate procedure to ensure the effective judgments rendered by foreign courts to be legally accepted by Chinese courts.
NOTES:
[1] http://tech.sina.com.cn/it/2014-08-05/14449536442.shtml [2] the Supreme People’s Court Administrative Order (2012) Zhi Xing Zi No. 60 [3] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 3223, Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 595 [4] Beijing First Intermediate Court Administrative Judgment (2007) Yi Zhong Zhi Xing Chu Zi No. 1115 [5] Beijing First Intermediate Court Administrative Judgment (2012) Yi Zhong Zhi Xing Chu Zi No. 1286, Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 1782 [6] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 2632, Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 1652 [7] Beijing First Intermediate Court Administrative Judgment (2006) Yi Zhong Xing Chu Zi No. 465, Beijing High Court Administrative Judgment (2006) Gao Xing Zhong Zi No. 383 [8] Beijing First Intermediate Court Administrative Judgment (2006) Yi Zhong Zhi Xing Chu Zi No. 735, Beijing High Court Administrative Judgment (2007) Gao Xing Zhong Zi No. 179 [9] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 2493, Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 1048 [10] Beijing First Intermediate Court Administrative Judgment (2012) Yi Zhong Zhi Xing Chu Zi No. 165 [11] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 2773, Beijing High Court Administrative Judgment (2011) Gao Xing Zhong Zi No. 436
92 [12] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 3026, Beijing High Court Administrative Judgment (2011) Gao Xing Zhong Zi No. 664 [13] Beijing First Intermediate Court Administrative Judgment (2012) Yi Zhong Xing Chu Zi No. 2386, Beijing High Court Administrative Judgment (2013) Gao Xing Zhong Zi No. 546 [14] Beijing High Court Administrative Judgment (2005) Gao Xing Zhong Zi No. 111 [15] Beijing First Intermediate Court Administrative Judgment (2009) Yi Zhong Xing Chu Zi No. 1461, Beijing High Court Administrative Judgment (2009) Gao Xing Zhong Zi No. 1350 [16] Beijing First Intermediate Court Administrative Judgment (2009) Yi Zhong Zhi Xing Chu Zi No.1800, Beijing High Court Administrative Judgment (2010) Gao Xing Zhong Zi No. 872 [17] Beijing First Intermediate Court Administrative Judgment (2012) Yi Zhong Xing Chu Zi No. 2462, Beijing High Court Administrative Judgment (2013) Gao Xing Zhong Zi No. 93 [18] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Xing Chu Zi No. 843, Beijing High Court Administrative Judgment (2011) Gao Xing Zhong Zi No. 1136 [19] Guangdong High Court Civil Judgment (2010) Yue Gao Fa Min San Zhong Zi No. 63, the Supreme Court Civil Order (2011) Min Shen Zi No. 259 [20] Beijing First Intermediate Court Administrative Judgment (2010) Yi Zhong Zhi Xing Chu Zi No. 3488, Beijing High Court Administrative Judgment (2011) Gao Xing Zhong Zi No. 857 [21] Beijing First Intermediate Court Administrative Judgment (2011) Yi Zhong Xing Chu Zi No. 2431, Beijing High Court Administrative Judgment (2013) Gao Xing Zhong Zi No. 962 [22] Beijing First Intermediate Court Administrative Judgment (2011) Yi Zhong Xing Chu Zi No. 2533, Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 219, the Supreme People’s Court Administrative Order (2012) Zhi Xing Zi No. 60
93 【HOT TOPICS AND TIPS】
Admissibility of New Evidence during Trademark Administrative Trials
Author: Ms. Yan ZHANG, partner at Beijing East IP Law Firm, trademark attorney and PRC Attorney-At-Law, China Trademark Office Subcommittee of the Trademark Office Practices Committee at INTA
Since the implementation of the Chinese Trademark Law 2001, the courts (the Beijing First Intermediate Court as the first instance court and the Beijing High Court as the second instance court) have been granted the final adjudication power for administrative cases involving the authorization and confirmation of trademark rights (hereinafter referred to as “Trademark Administrative Cases”), where interested parties sued the Trademark Review and Adjudication Board (TRAB) to court in connection with its administrative decisions in trademark rejection review, trademark dispute, and trademark cancellation review. The TRAB bears the burden of proof because of the nature of the review of trademark administrative proceedings, except under exceptional circumstances. Generally, evidence not presented during trademark review proceeding is not the basis of the TRAB’s decision, and should not be relied on by the court. But the court may consider some new evidence, where appropriate, in individual cases. This leads to the issue of the admissibility of new evidence in the trial of Trademark Administrative Cases.
Ⅰ. Types of new evidence in Trademark Administrative Cases and the courts’ basic attitude
Although the TRAB bears the burden of proof in Trademark Administrative Cases, plaintiff or a third party always actively submits a large number of new evidence to the court, including newly formed evidence, corroborative evidence, and evidence not previously presented to the TRAB without justified reasons. For evidence not previously presented to the TRAB without justified reasons, which is the most common “new” evidence, the court will generally not rely on it. We will focus on the admissibility of the other two types of new evidence.
1. Newly formed evidence
The so-called “newly formed evidence” refers to the evidence formed after the expiration of the time limit of proof required for trademark review proceeding, or after the issuance of the review decision. The court usually considers such evidence with reference to rules of evidence in civil procedure. However, if the newly formed evidence could have been but has not been collected during the TRAB proceeding, it shall not be deemed as new evidence, and will generally not be adopted by the court.
2. Corroborative evidence
Corroborative evidence in the court proceeding is the evidence that tends to support the fact that has already been supported by some initial evidence submitted to the TRAB. For such evidence, the court will determine whether to take it into consideration at its discretion. However, some of the so-called “corroborative evidence” is absolutely not corroborating evidence. For instance, in trademark opposition case where the plaintiff should prove its mark “has been prior used and has certain influence,” and the evidence shall be traced back prior to the application date of the disputed mark, if the plaintiff fails to submit such evidence in the review proceeding but
94 supplements it as corroborative evidence to the court, such evidence will usually be deemed as evidence not presented to the TRAB without justified reasons, rather than corroborative evidence.
Based on our experience, if the party provides the notarized or legalized evidence to corroborate the authenticity of evidence in the review proceeding, the court will generally accept it. It is common practice that the TRAB will generally not require notarization and legalization of evidence originated from outside China, but the court imposes more stringent requirement for notarization and legalization. In view of this, the party usually submits the notarized and legalized evidence as corroborative evidence. In the administrative case regarding the opposition against “SHI SHI CHENG DA YAO FANG in Chinese and Design” represented by us on behalf of Ritz-Carlton, the internationally renowned hotel, we successfully convinced the first and second instance courts to accept our new evidence, namely, the original legalized copyright registration certificate, as corroborative evidence. We argued that Ritz-Carlton did submit the photocopy of copyright registration certificate to the TRAB before the TRAB rendered its decision, and the TRAB should have requested Ritz-Carlton to submit the legalized copy of the copyright registration certificate if it deems necessary according to the TRAB Rules. Accordingly, the legalized document supplemented in the court proceeding should be deemed as corroborative evidence to prove the authenticity of evidence submitted to the TRAB.[1]
3. Basic approach of the courts in typical cases
According to Paragraph 2 of Article 28 of Interpretations on Several Issues concerning the Implementation of the Administrative Procedure Law, “if the plaintiff or a third party submits any rebuttal argument or evidence in the court proceeding, which is not presented in the administrative proceeding, the defendant may supplement evidence with the consent of the court.” This provision actually provides a legal basis for the plaintiff or a third party in the Trademark Administrative Cases to submit new evidence, and also demonstrates the possibility of the court’s acceptance of new evidence.
In judicial practice, the courts tend not to accept new evidence in general, but there are also precedents where the courts adopted the evidence newly submitted based on the principles of fairness and justice and the interests of the parties. In the administrative case regarding opposition against the “Johnson in Chinese and qiang sheng” mark, the first instance court held that the evidence submitted by Johnson and Johnson during the court proceeding was not contemplated by the TRAB, and should not be accepted as corroborative evidence.[2] But the second instance court adopted the corroborative evidence submitted by Johnson and Johnson and arrived at a different conclusion.
An alternate approach adopted by the courts is that the courts did not directly accept the new evidence, but ordered the TRAB to re-examine the evidence. In the administrative case regarding opposition against “Power Dekor in Chinese and Design,” the first instance court held that the new evidence submitted during the court proceeding shall not be accepted since it is not a basis for the TRAB decision. But as a large number of the new evidence is directly related to the dispute in this case, if not considered, not only would the parties’ legitimate interests be affected, it would also contradict with the objective truth. Whereas if directly adopted, it would also lead to the loss of administrative review procedure. In view of this, in order to achieve legal and social effects of judicial adjudication, the TRAB shall re-issue the decision relying on both the original evidence and the newly submitted evidence by the parties.[3] The second instance court affirmed the decision. [4]
95 This hotly debated issue is also involved in the typical trademark dispute case of Ritz-Carlton v. the TRAB and Chengdu Zhizhi Real Estate Development Co., Ltd. we handled in 2012. In this case, the TRAB and the courts have different views as to whether the “RITZ-CARLTON” mark could be recognized as a well-known mark, and the focus lies in the admissibility of the large amount of evidence newly submitted during the court proceeding. We did a lot of research and supplemented various evidence such as search results from the China National Library, Shanghai Library, China National Knowledge Infrastructure (CNKI), People’s Daily, Xinhua Net, etc, as corroborative evidence. Meanwhile, considering part of the evidence submitted during the TRAB proceeding are printed web pages, we further submitted the notarized documents as corroborative evidence. In addition, we categorized the evidence in groups, taking into account the time, purpose of proof, and whether the evidence has been submitted during the TRAB proceeding to facilitate the court in deciding which groups of evidence are admissible. After a great deal of effort, we successfully convinced the courts to accept our new evidence and obtained well-known mark recognition for Ritz-Carlton.
Beijing High Court affirmed in its judgment that the evidence supplemented by Ritz-Carlton is to strengthen the evidence submitted during the TRAB proceeding, in which Ritz-Carlton submitted substantial evidence to support its arguments. It would seriously affect Ritz-Carlton’s rights and interests if the evidence was not to be admitted, especially where that the “RITZ-CARLTON” mark may be recognized as a well-known mark if the evidence submitted during the TRAB proceeding and court proceeding has been taken into consideration comprehensively. Further, the rejection of new evidence would be contrary to the principle of fairness and justice. [5]
From the above we can see the courts’ attitude towards the new evidence in Trademark Administrative Cases differ. Trademark Administrative Cases are very special, and the judgments thereof are not only related to the interests of trademark right holders, but also related to public interests in the circulation area.
Ⅱ. Principle of changed circumstances in Trademark Administrative Cases
As mentioned above, the court’s review is largely based on the admission of the parties’ claims and supporting evidence by the TRAB. It is worth noting, however, the courts tend to explore how to deal with the new evidence and new facts, and apply the principle of changed circumstances in Trademark Administrative Cases.
1. New facts that affect trademark registration
In the administrative case of the rejection of trademark application for “ADVENT,” the Supreme Court finds that the cited mark became void due to non-use cancellation in the court proceeding, and thus the hurdle preventing the trademark application to be approved in this case would not exist. Under such circumstance, if the new fact was mechanically excluded from the scope of judicial review, it would be unfair to the trademark applicant. On the other hand, the application for trademark registration has not been completed during the court proceedings, and thus important facts occurred that may affect trademark registration shall be included in the scope of judicial review. [6]
In the administrative case of the rejection of trademark application for “GAPKIDS,” Beijing High Court finds that, given that the cited mark has been disapproved for registration by the Supreme Court in its Administrative Judgment (2012) Xing Ti Zi No. 10, the hurdle preventing the said mark to be registered no longer exists.
96 However, considering the Supreme Court’s decision, as new facts, occurred after the TRAB’s decision had been rendered, it cannot serve as the basis of the TRAB’s decision. The judgment of the second instance court is based on the new evidence and thus the litigation costs shall be incurred by the plaintiff GAP (ITM) INC. [7]
2. New evidence that affects the distinctiveness of trademark
In the administrative case of the rejection of trademark application for “BEST BUY and Design,” the TRAB rejected the application on the ground that the use of the two words as a trademark on certain services merely directly indicates the quality and characteristics of such services. The applicant, Jia Xuan Company, appealed to the court and provided various evidence to prove this mark has been actually used in China, thereby acquired distinctiveness through use. However, both Beijing First Intermediate Court and Beijing High Court sustained the rejection decision without considering the new evidence. The Supreme Court subsequently held after hearing, that the distinctiveness of a trademark is a dynamic process of change. Accordingly the adjudication will be based on relevant changing facts. The TRAB and the two instance courts failed to comprehensively consider the distinctiveness of the trademark, and did not consider the new evidence submitted by the applicant. As a result, the TRAB and the two instance courts wrongly held that the trademark lacks distinctiveness. The Supreme Court overturned the rulings. [8]
In summary, for plaintiff or a third party, on the one hand, it is recommended to make a good preparation and collect as much evidence as possible during the TRAB proceeding, so as to avoid the risk of not being admitted by the court later. On the other hand, the courts do not absolutely ignore new evidence submitted by the parties. Therefore, if new evidence submitted substantially affects the outcome of the case and interests of trademark right holders, the courts may adopt it at their discretion. As a result, it is also encouraged to do a further search and submit new evidence that substantially affects the case during the court proceeding and catch the last chance to protect or defend trademark rights.
NOTES:
[1] Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 595 [2] Beijing First Intermediate Court Administrative Judgment (2013) Yi Zhong Xing Zi No. 2170 [3] Beijing First Intermediate Court Administrative Judgment (2012) Yi Zhong Xing Zi No. 133 [4] Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 1106 [5] Beijing High Court Administrative Judgment (2013) Gao Xing Zhong Zi No. 927 [6] The SPC Administrative Judgment (2011) Xing Ti Zi No. 14 [7] Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 1677 [8] The SPC Administrative Judgment (2011) Xing Ti Zi No. 9
97 【HOT TOPICS AND TIPS】
Determination of Infringement and Use of Trademark in OEM Business
Author: Ms. Yan ZHANG, partner at Beijing East IP Law Firm, trademark attorney and PRC Attorney-At-Law, China Trademark Office Subcommittee of the Trademark Office Practices Committee at INTA
Original Equipment Manufacturer, commonly known as “OEM,” is and will continue to be a huge business in China. Whether OEM constitutes trademark infringement is of great practical significance to foreign companies whose manufacturing bases are in China, and the issue has always been the subject of hot debates. In OEM business, a local Chinese company manufactures the products on behalf of a foreign brand owner with the foreign brand owner’s trademark, but the products are solely for export and not sold in China. Does such use of trademark by the Chinese manufacturer constitute trademark infringement where the rights to the said trademark in China are held by another entity? Can the argument of non-circulation in the Chinese market constitute a reasonable defense against trademark infringement? Is the trademark use in OEM sufficient to meet the requirement of use in the non-use cancellation? This raises the question as to whether using a trademark in OEM constitutes “use” under the Chinese Trademark law.
To date, there is no clear guidance in the statutory law, and no unified conclusions have been reached in judicial practice regarding this issue. Conflicts arise among various Administrative Departments for Industry and Commerce and local Customs in the enforcement proceeding. The local Courts’ views also differ widely on this point and are evolving gradually. Beijing High Court holds that a likelihood of confusion shall be considered to establish trademark infringement, and if using a trademark in OEM does not cause confusion, no infringement would be established. The Zhejiang High Court believes that the use of the same trademark would constitute trademark infringement, and if not identical, the determination of infringement shall be strictly controlled. The Fujian High Court also insists on the standard of strict control. In the case of reasonable defense, OEM would not be regarded as infringement, and even if the infringement is determined, without the economic loss, the court would only order the infringer to cease infringing acts and pay reasonable fees. This article summarizes several typical cases involving OEM, and aims to have an overview on the determination of infringement and use of trademark in OEM business.
I. Typical cases and views regarding trademark infringement
1. The “NIKE” case in 2002
In 2000, Jiaxing Yinxing Garments Ltd. (Jiaxing Yinxing) and Zhejiang Animal Products Ltd. (Zhejiang Animal) were entrusted by Cidesport Company of Spain to manufacture clothes bearing the trademark of “NIKE” in China for export to Spain, where Cidesport Company was the proprietor of the “NIKE” mark. Nike International Ltd. (Nike) initiated an infringement lawsuit before the Shenzhen Intermediate Court based on its registered trademark right regarding “NIKE” in China. In December 2002, the Shenzhen Intermediate Court held that the acts of OEM manufacturers involved the use of the “NIKE” mark in China and the acts of the three defendants (Jiaxing Yinxing, Zhejiang Animal and Cidesport Company) infringed upon Nike’s trademark right in China. The Court ordered the three defendants to cease infringing acts immediately and compensate Nike’s losses for around US$50,000. [1]
98
2. The “RBI” case in 2005
Ningbo Ruibao International Trading Co., Ltd. (Ningbo Ruibao) is the owner of the registered mark “RBI” in connection with the goods for bearings in China. In June 2005, Ciyi Yong Sheng Bearing Co., Ltd. (Ciyi Yong Sheng) was entrusted by R.B.I INTERNATIONAL INC. (R.B.I), the holder of the trademark “RBI” in the U.S., to manufacture bearings with the trademark “RBI” in China and export them directly to the U.S. This case was brought to the Ningbo Intermediate Court, and was later appealed to the Zhejiang High Court. The Zhejiang High Court held that trademark protection is territorial. Ciyi Yong Sheng, as a domestic manufacturer, had reviewed the status of the trademark owned by R.B.I when signing the OEM agreement. But as the places for manufacturing and delivery are in China, the relevant provisions of the Chinese Trademark Law shall be binding, and a reasonable duty of care shall be imposed. The Court ruled that Ciyi Yong Sheng’s unauthorized use of the trademark identical to Ningbo Ruibao’s registered trademark on bearing goods constitutes trademark infringement, and shall bear corresponding civil liabilities. [2]
As can be seen from the above two cases, the Courts in earlier judicial practice ruled that the acts of OEM manufacturers constitute trademark infringement in accordance with Article 52(1) of the Chinese Trademark Law 2001 which prescribes that “to use a trademark that is identical with or similar to a registered trademark in respect of the identical or similar goods without the authorization from the trademark registrant constitutes trademark infringement.” The basic theory to support trademark infringement is trademark regionalism. Manufacturing and export of products bearing the trademark identical with or similar to a registered mark in China owned by a third party shall constitute trademark infringement, even if the OEM manufacturer has been duly authorized by the owner of a trademark registered in the destination jurisdiction.
However, a number of recent cases manifested that there was no trademark infringement on the part of OEM manufacturers, if the products are merely manufactured in China and are offered only for sale in overseas markets.
3. The “JOLIDA” case in 2009
Shanghai Shenda Audio Electronic Co., Ltd. (Shanghai Shenda) is the owner of the registered mark “JOLIDA and Design” in connection with the goods for amplifiers, radios, etc. in China. Jiulide Electronics (Shanghai) Co., Ltd. (Jiulide Electronics) was entrusted by its U.S. parent company JoLida Inc. to manufacture amplifiers with the “JOLIDA” mark in China. Shanghai Shenda was established by JoLida Inc. as a wholly foreign owned enterprise in 1996, but was subsequently sold to another U.S. company.
In 2009, the amplifiers manufactured by Jiulide Electronics were seized by Shanghai Customs for alleged trademark infringement when they were exported to the U.S. Jolida Inc. successfully challenged the seizure before the Shanghai Intermediate Court, which ruled that there was no infringement. The Court held that the basic function of a trademark is to indicate the origin. As the OEM products were all for export to the U.S. and would not be offered for sale in China, there could be no likelihood of confusion as to their origin in the Chinese market and, hence, no infringement against Shanghai Shenda’s registered mark.[3] The Shanghai High Court affirmed the decision of the first instance court.[4]
99 4. The “CROCODILE” case in 2011
Crocodile Garments Limited (Crocodile) owns a “CROCODILE” registration in China, which is recorded with the Chinese General Administration of Customs. Taishan Li Fu Garments Limited (Taishan Li Fu) manufactured shirts labeled with “CROCODILE and Design” under the authorization of Yamato International Corporation, which owns a “CROCODILE” trademark registration in Japan. The shirts were detained by the Customs due to suspected infringement. This case was brought to the Zhuhai Intermediate Court, and was later appealed to the Guangdong High Court. The Guangdong High Court held the view that, trademarks may only reveal their function and value when products are actually circulated in the market. Since the products were to be exported to Japan and not sold in the Chinese market, Chinese relevant public had no basis to be confused or misled, and the Chinese market portion of Crocodile would not be occupied either. Considering Taishan Li Fu’s subjective intention, and the use situation of the accused trademark as well as other factors, the Court decided that no infringement existed.[5]
Recent case findings seem to indicate a trend for the Courts to hold that OEM does not constitute trademark infringement, which clearly differs from the earlier decisions. In light of the foregoing, confusion among the relevant public is regarded as the key element in determining whether there has been infringement. As OEM products are solely for export, products with foreign trademarks will not result in confusion among the public in China and consequently, no infringement shall be found. In fact, the Chinese Trademark Law 2013 clarifies the definition of trademark use, and emphasizes that “use” in the sense of Trademark Law with the purpose of “identifying the sources of goods/services.” Furthermore, the notion of confusion has been included in the Chinese Trademark Law 2013, which defines confusion as the basis for determining infringement for similar marks/signs on identical goods/services or identical marks/signs on similar goods/services. Therefore, the key function of trademark use is to identify the origin of goods, and the essence of trademark infringement is that the use of the accused trademark hinders the realization of such function, and thus it is likely to cause confusion and misleading.
The China Supreme Court has not yet expressed a clear standard for this issue, and the most likely response may be found in the Notice of the Supreme Court on Issuing the Opinions on Several Issues concerning Intellectual Property Trials Serving the Overall Objective under the Current Economic Situation (No. 23 [2009] of the Supreme Court), which is intended to provide a guidance to the Courts so as to adjudicate IP cases in a manner that is consistent with the advancement of China’s national IP strategy. The opinions point out that “we shall properly handle the disputes over trademark infringement arising frequently from the current foreign trade model of OEM processing, and where any trademark infringement is found, the infringement liabilities shall be reasonably determined by taking into account whether the processing party has performed the duty of necessary examination and care.” In 2012, Xiangjun KONG, the Chief Judge of the IP Tribunal of the Supreme Court published an article titled “On Eight Relations in Trademark Judicial Practice,” which shows the cautious attitudes of the Supreme Court towards such cases. It states that “under the circumstances that the laws are not clear or there are two or more illustrations required to clarify its connotations, or the laws lag behind the needs of social development, or even there is a legal vacancy, the Courts’ judgments can be experimental, tentative, or error-and-trial, and even the Courts need to explore and create in many cases. Therefore, different judgments for similar cases are inevitable, that is, the differences do exist in applying laws. Especially for controversial issues where no consensus can be reached, we often hold cautious attitudes without ruling out the attempt and test in individual cases, and when the conditions mature, our standards can be unified. The use of trademark in OEM
100 business is a pretty typical instance.” Hence, we can see that the Supreme Court leaves this issue to the lower Courts’ discretions, which directly leads to the current situation of different judgments in cases with similar facts and issues.
II. Use of trademark in non-use cancellation
It appears that there is a judicial trend in trademark infringement cases influencing the Courts in interpreting what constitutes trademark use, especially in relation to the non-use cancellation. However, there is still no clear and definitive guidance as to whether OEM activities constitute valid use in a non-use cancellation proceeding. For example, in the cancellation case against the mark “SCALEXTRIC” owned by Hornby Hobbies Limited, Beijing First Intermediate Court held that the trademark use in OEM should not be deemed as valid use under the Chinese Trademark Law. Since the products were not sold in the Chinese market, such use could not fulfill the function of a trademark, that is, to indicate the origin of goods.[6] However, Beijing High Court overturned the decision, by holding that although the OEM products were not sold in the Chinese market, it would be unfair not to take into account the use of trademark in OEM and also not consistent with the Chinese policy of expanding foreign trade.[7] Apparently, Beijing High Court took public policy into consideration, and the OEM issue also has impacts on foreign trade development and balance policy.
Furthermore, in the most recent and typical case of Ryohin Keikaku Co., Ltd. v. the TRAB (“Muji” case), the Supreme Court held that the function of a trademark can only be fulfilled in the circulation of the goods in commerce, which was not apparent in this case, as the goods are neither distributed nor promoted in China. The Supreme Court ruled that evidence of such use in OEM is not sufficient for the purpose of showing that the trademark has been “used and achieved a certain influence in China” as stipulated in Article 32 of the Chinese Trademark Law.[8] This decision has caused a great sensation among foreign companies with manufacturing bases in China. Even if the Supreme Court’s opinion is not codified in statutory laws, it provides some guidance to the lower Courts in future practice. As such, it can be expected that there might be more and more Courts finding that the use of trademark in OEM is not “use” under the Trademark Law, and foreign companies may face risks of non-use cancellation if they can only provide evidence of OEM activities in China.
However, there has been an ongoing discussion about whether this decision indicates that OEM manufacturing purely for export will likely no longer be deemed as trademark use. It is worth noting that the Supreme Court did not explicitly deny that trademark use can be achieved by way of OEM. The Supreme Court just held that it is difficult for brand owners to prove that a trademark has achieved a certain influence if only providing limited evidence of trademark use in OEM manufacturing. In my view, this decision mainly interprets the use with a certain influence in China under Article 32 of the Chinese Trademark Law and does not address the question of whether OEM manufacturing for exports constitutes trademark “use” for non-use cancellation under Article 49 of the Chinese Trademark Law. The question of whether use in OEM constitutes actual “use” under the Chinese Trademark Law does not have a simple black or white answer. Based on the cases above, the “use” involved in provisions of Article 32 and Article 49 should be interpreted differently in the law application. As can be seen from the “SCALEXTRIC” case, the requirement for use under Article 49 should be considered as relatively low.
Also noteworthy is that the Muji case does not provide definitive guidance on what constitutes trademark “use” under Article 57, or the determination of trademark infringement. Judge KONG also mentioned the Muji case in his article “On Eight Relations in Trademark Judicial Practice,” and explicitly indicated that enforcement
101 against OEM manufacturers remains as a topic for discussion, which implies that this issue can be expected to continue to see swaying application of law.
In light of the foregoing and in order to avoid the risk of potential infringement, foreign brand owners are recommended to conduct a thorough search for the registered trademark with the Chinese Trademark Office and recordation information with the General Administration of Customs first. Further, foreign brand owners should clearly express in the OEM agreement that the products are solely for export and provide proof to the OEM manufacturers that it legitimately owns trademark rights in the export destination country. In addition, it is encouraged to make a reasonable defense by taking advantage of other legal provisions, principles, and judicial interpretation, given that there is no clear and specific guidance in the statutory laws.
NOTES:
[1]Shenzhen Intermediate Court Civil Judgment (2001) Shen Zhong Fa Zhi Chan Chu Zi No. 55 [2] Zhejiang High Court Civil Judgment (2005) Zhe Min San Zhong Zi No. 284 [3] Shanghai First Intermediate Court Civil Judgment (2008) Hu Yi Zhong Min Wu (Zhi) Chu Zi No. 317 [4] Shanghai High Court Civil Judgment (2009) Hu Gao Min San (Zhi) Zhong Zi No. 65 [5] Guangdong High Court Civil Judgement (2011)Yue Gao Fa Min San Zhong Zi No. 467 [6] Beijing First Intermediate Court Administrative Judgment (2009)Yi Zhong Xing Zi No. 1840 [7] Beijing High Court Administrative Judgment (2010) Gao Xing Zhong Zi No. 265 [8] The SPC Administrative Judgment (2012) Xing Ti Zi No. 2
102 【HOT TOPICS AND TIPS】
Influence of the Coexistence Agreement on Registrability of Trademarks
Author: Ms. He HUANG, trademark attorney and PRC Attorney-At-Law at Beijing East IP Law Firm
I. Key Issues
(1) Coexistence agreement becomes more and more acceptable in China practice.
(2) Even if there is a coexistence agreement, the key criteria is whether registration of a mark will have prejudice effect to the public’s interest.
II. Typical Cases
1. A Logo
Trademark Application Cited Prior Trademark
Avago Technologies General IP (Singapore) Pte. Ltd. (hereinafter referred to as “Avago”), successfully obtained registration for its core trademark (A Logo) (Registration No. 5226289, red color designated) in China in January 2010.
The application for registration of the A Logo is filed in the name of Argos Acquisition Pte. Ltd. (hereinafter referred to as “Argos”) in 2006 (the A Logo was later assigned to Avago in 2009). In 2008, the A Logo was rejected by the Chinese Trademark Office (CTMO) on the ground that it shall be deemed similar to the prior registered trademark (International Registration No. 789052) in terms of similar goods. Avago filed a rejection appeal before the TRAB.
In the appeal, Avago argued that the two marks are dissimilar in overall appearance. More importantly, Avago submitted a certified and legalized copy of coexistence agreement entered by Argos and Areva Societe Anonyme A Directoire Et Conseil De Surveillance (hereinafter referred to as “Areva”). In the agreement, Areva agreed that Argos, including the assignees of its trademark right, registers and uses the A Logo and marks including A Logo in semi-conductors, etc. and Areva will not oppose registration or use of the A Logo.
In January 2010, the Trademark Review and Adjudication Board (TRAB) supporting Avago’s arguments and the evidence Avago submitted. The TRAB holds the view that there exists no conflict of rights because Areva and Argos had entered into a coexistence agreement and the agreement was legalized and certified. Moreover, the TRAB supported that the marks are different in design and could be differentiated in overall appearance. Finally,
103 Avago obtained registration for the A Logo.
2. UGG
Trademark Application Cited Prior Trademark
The trademark UGG (No. 6379162) was rejected by the CTMO due to the prior similar mark UCG (International Registration No. 951748). The applicant Deckers Outdoor Corporation (hereinafter referred to as “Deckers”) appealed with the TRAB and further appealed with Beijing First Intermediate Court (the first instance court). In the court appeal, Deckers submitted the legalized and certified copy of the consent letter executed by the owner of the prior mark UCG (International Registration No. 951748). The first instance court held that the consent letter did not rule out the likelihood of confusion among the relevant public consumers, therefore, the trademark shall not be registered.
However, Beijing High Court (the second instance court) held a different view from the first instance court. The second instance court held that the legalized and certified coexistence agreement shall be taken into consideration when deciding the likelihood of confusion, and there was no evidence that the coexistence agreement will prejudice public interests. In addition, the second instance court also took into consideration that the trademark UGG in Class 25 was recognized as a well-known trademark by the CTMO.
3. Molecular Designed Trademark
Trademark Application Cited Prior Trademark
The CTMO rejected the application for registration of the design trademark (Application No. 7358249) filed by Scino Pharm Taiwan, Ltd.’s mark. Scino Pharm Taiwan, Ltd. appealed with the TRAB and subsequently went through two instances of court appeals.
Beijing High Court as the second instance court took into consideration of the legalized and certified coexistence agreement. However, it also held that the design consists of molecular structure which is generic in the field of chemical industry. Molecular structure constitutes publicly-owned resources. Therefore, the registration of the design will lead to monopoly of public resources and prejudice to the public interests. Therefore, the design trademark shall not be registered.
4. RAGE with Design
104 Trademark Application Cited Prior Trademark
The RAGE with Design mark (Application No. 8533178) was rejected by the CTMO due to the prior mark RAGE (Registration No. 6100838). The applicant ID Software LLC (hereinafter referred to as “ID Software”), appealed through Beijing High Court.
In the appeals, ID Software submitted a co-existence agreement. However, the courts held that registration of the RAGE with Design mark will likely cause confusion among the relevant public. Thus, registration of the RAGE with Design mark was not approved.
III. Analysis and Comments
1. Laws and Regulations
Article 30 of the Chinese Trademark Law 2013 states that where a trademark registration is not in conformity with the relevant provisions of this Law, or is identical with or similar to the trademark of another person that has, in respect of the same or similar goods, been registered or, after examination, preliminarily approved, the CTMO shall reject the application and shall not publish the said trademark.
Rule 8 of Rules of the Trademark Review and Adjudication stipulates that during the review and adjudication, an interested party shall have the right to dispose of, according to law, his trademark right and the right relating to trademark review and adjudication. Provided that public interests and a third party’s rights will not result in prejudice, and interested parties may reach an amicable settlement agreement in writing by themselves or by mediation. The TRAB may close a case or render a decision provided an amicable settlement agreement is reached by interested parties.
2. Whether the coexistence agreement shall be considered and the roles it plays when deciding registrability of the trademarks
In the event that the marks are highly similar and a consent letter is executed by the owner of the prior mark or a coexistence agreement is reached, the consent letter or coexistence agreement shall be taken into consideration when deciding the registrability of the mark. The reasons and the roles the agreement plays are as follows:
First, the purposes and principle for Article 30 of the Chinese Trademark Law 2013 are 1) to protect private interests of owners of the prior registrations/applications to avoid conflicts of trademark rights; and 2) to protect public interests, i.e. to avoid confusion among the relevant consumers or to avoid other prejudice to the public interest such as monopoly of the public resources.
Second, from the perspective of avoiding conflicts of trademark rights, trademark right as a private right may be disposed of according to the will of owners of trademark registrations/applications. A coexistence agreement reached by interested parties through friendly negotiation reflects that the owners of the prior registrations/applications agree to the registration and use of a similar trademark in connection with identical or similar goods or services. The coexistence agreement also indicates that both parties will not free ride and the parties have good faith to differentiate from each other when using the marks. In this case, the coexistence
105 agreement shall be taken into consideration because it eliminates conflicts of trademark rights between former and latter registrations/applications. Otherwise, it will be unreasonable.
In the above cases of A Logo, UGG, and the Design, the TRAB and the courts considered coexistence agreement reached by the interested parties. For example, the TRAB held that considering the coexistence agreement for the A Logo was reached, and the agreement was certified and legalized, the applicant of the A Logo and owner of the cited trademark do not have conflict in their rights.
Third, protecting the public interests is another purpose and principle for Article 30 of the Chinese Trademark Law 2013. When deciding registrability of the marks, it shall also consider whether any confusion among the relevant public is likely to be caused, or whether registration of the trademarks will bring other prejudice to the public interest such as monopoly of the public resources. Accordingly, the factors to be considered are as follows: 1) similarity between the goods/services of the trademarks, similarity between the trademarks; and 2) fame of the trademarks.
In its decision for the mark UGG, Beijing High Court decided that two marks are highly similar. However, it further explained that “the possibility of confusion among the relevant public is a presumption made by trademark authorization administrative organs or the people’s courts from the perspective of the relevant public. However, a coexistence agreement is concluded by directly-interested parties. The judgment for these parities corresponds more to the actual market. Thus, the consent letter is a powerful evidence to rule out the possibility of confusion unless there are other obvious factors indicating that likelihood of confusion probably exists.”[1]
Moreover, Beijing High Court also considered the fact that mark UGG was once recognized as a well-known trademark by the CTMO in trademark administrative cases.
In the case of the design trademark, although a certified and legalized coexistence agreement was submitted, the court held that the molecular structure is public resource. Registration of the trademark will damage interests of the public and monopolize public resources. Thus, the design trademark shall not be registered.
Forth, obtaining a coexistence agreement does not guarantee overcome of rejection by the CTMO / the TRAB. In the event that the trademarks are identical and the designated goods/services are also the same, even if a coexistence agreement is reached, the TRAB or courts will presume there exists a possibility of confusion, thus it will not accept the coexistence agreement. Accordingly, the mark will not be granted registration.
In summary, coexistence agreement becomes more and more acceptable in China practice. It is a powerful evidence to overcome conflicts of private rights. But obtaining a coexistence agreement does not guarantee registration of the mark because public interest can be another decisive factor.
3. Legal requirements for a coexistence agreement to be accepted for registration of a trademark
1) Format: certified and legalized. To be considered, a certified and legalized copy of the coexistence agreement is required.
2) Contents: In contents, it shall include statements where the interested parties believe that no confusion will be
106 caused among relevant public; and that the interested parties agree to the registration and use of the trademark in connection with some specific products/services.
IV. Suggestions
In the event that a trademark is rejected by the CTMO due to prior trademarks and the mark is the core trademark of a applicant, we would usually suggest the applicant to file a rejection appeal with the TRAB as the applicants who finally obtained the trademark registration.
In the meantime, if the trademarks are highly similar and the owners of the prior trademarks are foreign entities who are more likely to agree to the registration and use of a applicant’s trademark than a Chinese entity does, the applicant may actively seek a coexistence agreement or a consent letter from the owners of the prior trademarks.
The coexistence agreement or the consent letter shall include where the interested parties believe that no confusion will be caused among relevant public, and the interested parties agrees registration and use of a specific trademark in connection with some specific products/services. In addition, the applicant shall file for certification and legalization of the coexistence agreement or the consent letter.
NOTES:
[1] Beijing High Court Decision (2012) Gao Xing Zhong Zi No. 1043
107 【HOT TOPICS AND TIPS】
Registrability of Trademarks Identical with or Similar to State Name and Geographical Name
Author: Ms. Qing YU, trademark attorney at Beijing East IP Law Firm
The registration of trademarks identical with or similar to state name and geographical name is strictly restricted in China. This article intends to probe into the issue of the registrability of trademarks identical with or similar to state name and geographical name.
I. Definition of state name and geographical name
1. State name discussed in this article refers to the state names of the People’s Republic of China and foreign countries, including the full name, acronyms, and abbreviations both in Chinese and foreign languages.
2. Geographical name discussed in this article refers to the geographical names as the administrative divisions at or above the county level in China and foreign geographical names well-known to the public.
II. Key Issues
1. The signs identical with or similar to the state name of the People’s Republic of China shall not be registered or used as trademarks.
2. The signs identical with or similar to the state names of foreign countries shall not be registered or used as trademarks, except that the foreign state government agrees otherwise on the use.
3. The geographical names as the administrative divisions at or above the county level shall not be used as trademarks, but such geographical terms that have other meanings or are part of a collective mark or a certification mark shall be excluded.
4. Foreign geographical names well known to the public shall not be used as trademarks, but such geographical terms that have other meanings or are part of a collective mark or a certification mark shall be exclusive.
III. Typical Cases
1. China Jin Liquor in Chinese and Design
The applicant Jin Brand Co., Ltd. applied the trademark of “China Jin Liquor in Chinese and Design” (Subject
108 Mark) for goods of “Alcoholic fruit extracts; Wine, etc.” on October 20, 2005. On February 26, 2008, the Chinese Trademark Office (CTMO) rendered the rejection decision holding that the Subject Mark, which contains the state name of China in Chinese, shall not be registered or used as a trademark, and shall be rejected from registration according to Article 10(1)(1) and Article 28 of the Chinese Trademark Law 2001. [1] The applicant was dissatisfied with the CTMO rejection decision and appealed to the Trademark Review and Adjudication Board under the State Administration for Industry and Commerce (TRAB). The TRAB holds that the Subject Mark shall be rejected from registration according to Article 10(1)(1) of the Chinese Trademark Law 2001. [2] The applicant filed the court appeal against the TRAB rejection decision before the court. Beijing First Intermediate Court (the first instance court) and Beijing High Court (the second instance court) hold that the Subject Mark composed of the Chinese characters “China Jin Liquor in Chinese” and the design of a seal. The Chinese character “Jin in Chinese” is dominantly displayed on the left side of the seal design with a special font significantly different from those Chinese characters “China Liquor in Chinese,” which shall be deemed as the distinctive part of the Subject Mark. Although the Subject Mark contains the state name of China in Chinese, the state name only indicates the country of the Applicant. Thus Beijing First Intermediate Court and Beijing High Court reversed the TRAB rejection decision. [3] [4]
Then the Supreme People’s Court (SPC) heard this case and rendered the retrial decision on December 24, 2010, denying the registration of the Subject Mark and restricted the registration using the state name of China in Chinese as part of the trademark on the grounds of unhealthy influences. The Chinese characters “China Jin Liquor in Chinese” is the distinctive part of the Subject Mark. The SPC holds that the use of the state name “China in Chinese” as components of a trademark is an abuse of the state name and causes unhealthy influence to the public interests and order. [5] Thus, the prominent use of the Chinese characters “China in Chinese” has violated the regulation of Article 10(1)(8) of the Chinese Trademark Law 2001. The SPC held that the TRAB shall further examine whether the registration of the Subject Mark violated the relevant regulations of the Chinese Trademark Law 2001 and re-decide the rejection decision.
The TRAB re-issued the rejection decision on July 4, 2011 and rejected the registration of the Subject Mark based on Article 10(1)(8) of the Chinese Trademark Law 2001. [6] The applicant was dissatisfied with the TRAB rejection decision and appealed before the court. Eventually, Beijing High Court (the second instance court) rendered the decision on March 15, 2012, holding that the use of the state name of China in Chinese as components of a trademark is an abuse of the state name and causes unhealthy influence to the public interests and order, and the Subject Mark shall be prohibited from registration under Article 10(1)(8) of the Chinese Trademark Law 2001. [7] [8]
2. Munich RE and Design
Beijing High Court (the second instance court) rendered its decision on November 18, 2013 regarding the rejection appeal of the mark “Munich RE and Design” with the International Registration No. 1024730 (Subject Mark) owned by Munich Reinsurance Company. The Court reversed the TRAB decision and supported the claims of Munich Reinsurance Company by holding that the geographic name of “Munich,” which is a foreign
109 geographical name located in Germany well-known to the public, is only part of the Subject Mark, where the Subject Mark composed of the geographic name “Munich” and the letters “RE” and the Design. The English trade name of the applicant is “Munich Reinsurance Company,” which mainly provides reinsurance services. The evidence provided by Munich Reinsurance Company can prove that “Munich RE” is the abbreviation of “Munich Reinsurance.” The relevant public will not deem the Subject Mark as a geographic name. Thus although the Subject Mark contains a geographic name, the addition of other components makes the Subject Mark to obtain other meanings which is different from the geographic meaning. The Subject Mark shall not be deemed as marks that shall be prohibited from registration on the ground of consisting foreign geographical names well-known to the public. [9]
3. THE VENETIAN and V Crest and Winged Lion
The court decisions regarding the rejection appeals of the trademarks “THE VENETIAN and V Crest and Winged Lion” (Application Nos. 4815054, 4815053, and 4815056) in Classes 41, 43, and 44 owned by Las Vegas Sands Corp. rendered by Beijing First Intermediate Court hold that the trademark is composed of THE VENETIAN and a winged lion. Despite VENETIAN can be translated into “…. of Venice and the people in or from Venice” in Chinese and VENICE in Chinese is a foreign geographical name well-known to the public in China, the addition of the winged lion, however, makes the trademark to have distinctive features and no longer use the geographical name as its primary meaning, which enables the trademark not to constitute the marks that shall be prohibited from registration. [10] [11] [12]
4. LAS VEGAS SANDS
The CTMO rendered the notification of provisional refusal of protection concerning the mark “LAS VEGAS SANDS” with International Registration No. 1049699 (Subject Mark) owned by Las Vegas Sands Corp. on the ground that “LAS VEGAS” shall not be used as a trademark as it is a foreign geographical name well-known to the public under Article 10(2) of the Chinese Trademark Law 2001. Disagreed with the rejection decision, Las Vegas Sands Corp. appealed to the TRAB claiming the principal grounds as follows: First, the meaning of the Subject Mark as a whole is different from the geographic meaning. The registration and use of the Subject Mark will not cause confusion among the relevant public, which is not in violation of Article 10(2) of the Chinese Trademark Law 2001. Second, Las Vegas Sands Corp. enjoys trade name right on the Subject Mark. The registration of the Subject Mark is of legitimate and reasonable grounds. Third, the Subject Mark has enjoyed high fame and can distinguish the source of services through use and promotion. The TRAB rendered the decision on January 7, 2014 holding that although the Subject Mark contains “LAS VEGAS,” the meaning of the Subject Mark as a whole is different from the geographic meaning. The Subject Mark does not constitute the circumstance regulated under Article 10(2) of the Chinese Trademark Law 2001. [13]
IV. Analysis and Comments
110
1. Signs identical with or similar to the state name of China
Article 10(1)(1) of the Chinese Trademark Law 2001 stipulates that “The following signs shall not be used as trademarks: those identical with or similar to the state name … of the People's Republic of China…”
Article 10(1)(8) of the Chinese Trademark Law 2001 stipulates that “The following signs shall not be used as trademarks: …those detrimental to socialist morality or customs, or having other unhealthy influences.”
According to Rule 3(10) of the “Examination on the Signs which Shall Not Be Registered as Trademarks” of the Trademark Examination Standard, the state name of China regulated in this Article include the full name, acronyms, and abbreviations of China in both Chinese and foreign languages, such as “CN,” “CHN,” “P. R. C.,” “CHINA,” “P. R. CHINA,” and “PR OF CHINA.”
The following signs shall be deemed identical with or similar to the state name of China:
(1) Where the letters or characters of the signs are identical with the state name of China, the signs shall be deemed identical with the state name of China.
(2) Where the meanings, pronunciation, or overall appearances of the signs are similar to the state name of China, which tends to mislead the relevant public that the signs are the state name of China, the signs shall be deemed similar to the state name of China.
(3) Where the signs contain the characters identical with or similar to the state name of China, the signs shall be deemed similar to the state name of China.
However, the following three kinds of signs which contain the characters identical with or similar to the state name of China can be registered and used as trademarks:
(1) Where the signs are description of objective things or reality, which will not cause confusion among the relevant public;
(2) Where the signs containing characters identical with or similar to the state name of China are the name of newspapers, periodicals, and magazines, or the name of the legally registered enterprises as a whole;
(3) Where the signs applied by a Chinese applicant containing the state name of China that is separate from other components of distinctiveness of the signs, and if the state name of China only indicates the country of the applicant, the signs may be registered and used as trademarks.
In addition, the signs applied by foreign individuals or enterprises containing the state name of China shall be deemed as intended to cause confusion among the relevant public and have unhealthy influences, and shall be rejected from registration under Article 10(1)(8) of the Chinese Trademark Law 2001.
The registration of signs identical with or similar to the state name of China is strictly restricted in China, and
111 may be rejected under Article 10(1)(1) and Article 10(1)(8) of the Chinese Trademark Law 2001. From the “China Jin Liquor in Chinese and Design” (Application No. 4953206) case, it can be concluded that the overall appearance of a trademark shall be considered when determine whether a mark is identical with or similar to the state name of China. Where a trademark contains the characters identical with or similar to the state name of China, but that trademark as a whole is not identical with or similar to the state name of China with additional components of other elements, thus, the trademark shall not be rejected from registration under Article 10(1)(1) of the Chinese Trademark Law 2001. However, the registration and use of such trademarks containing the characters identical with or similar to the state name of China is an abuse of the state name and causes unhealthy influence to the public interests and order. Thus, such marks containing the characters identical with or similar to the state name of China shall be rejected from registration under Article 10(1)(8) of the Chinese Trademark Law 2001.
2. Trademarks identical with or similar to the state names of foreign countries
Article 10(1)(2) of the Chinese Trademark Law 2001 stipulates that “the following signs shall not be used as trademarks: …those identical with or similar to the state names … of foreign countries, except that the foreign state government agrees otherwise on the use.”
According to Rule 4(1) of the “Examination on the Signs which Shall Not Be Registered as Trademarks” of the Trademark Examination Standard, the state names of foreign countries regulated in this Article include the full names, acronyms, and abbreviations of foreign countries both in Chinese and foreign languages.
The following signs shall be deemed identical with or similar to the state names of foreign countries:
(1) Where the letters of the signs are identical with the state names of foreign countries, the signs shall be deemed identical with the state names of foreign countries.
(2) Where the letters of the signs are similar to the state names of foreign countries, or the signs contain the characters (Chinese or foreign) similar to the state names of foreign countries, the signs shall be deemed similar to the state names of foreign countries.
However, there are some exceptions:
(1) The foreign government agrees on the registration of the trademark.
The applicant shall submit written documents to prove that the foreign government agrees on the registration of the trademark. The registration of the trademark in this foreign country may prove that the foreign government agrees on the registration of the trademark.
(2) The trademarks have other specific meanings and will not cause confusion among the relevant public.
(3) The trademarks are identical with or similar to the previous names of the foreign countries. However, if such trademarks will cause confusion among the relevant public as to the origin of goods, the trademarks shall be deemed having unhealthy influences and be rejected from registration under Article 10(1)(8) of the Chinese
112 Trademark Law 2001.
(4) The characters of the trademarks may make the relevant public believe that the trademarks are composed of the Chinese abbreviations of more than two foreign countries, which will not cause confusion among the relevant public as to the origin of goods. However, if such trademark will cause confusion among the relevant public as to the origin of goods, it shall be deemed having unhealthy influences and be rejected from registration according to Article 10(1)(8) of the Chinese Trademark Law 2001.
(5) Where the trademark consists of letters identical with or similar to the state name of a foreign country, but is the enterprise name of the applicant as a whole.
(6) The state name contained in the mark is separate from the trademark’s other distinctive components and merely indicates the country origin of the applicant.
3. The geographical names as the administrative divisions at or above the county level
Article 10(2) of the Chinese Trademark Law 2001 stipulates that “the geographical names as the administrative divisions at or above the county level … shall not be used as trademarks, but such geographical terms that have other meanings or are part of a collective trademark or a certification trademark shall be excluded. Where a trademark using any of the above-mentioned geographical names has been approved and registered, it shall remain valid.”
According to Rule 11(1) of the “Examination on the Signs which Shall Not Be Registered as Trademarks” of the Trademark Examination Standard, the trademarks composed of or containing the geographical names as the administrative divisions at or above the county level shall be deemed identical with the geographical names as the administrative divisions at or above the county level in China.
However, the following trademarks containing the geographical names may be registered and used as trademarks:
(1) The geographical names contained in the trademarks have other specific meanings which are stronger than the geographical meanings.
(2) The trademarks are distinctive as a whole compose of geographical names and other characters, which will not cause confusion among the relevant public as to the origin of goods.
(3) The trademarks containing the geographical name are the full names of the applicant.
(4) The geographical names are part of a collective trademark or a certification trademark.
(5) The geographical names contained in the trademarks are separate from the trademark’s other distinctive components and only indicate the location of the applicant.
In addition, it is worth noting that if the characters contained in the trademarks are not identical with the
113 geographical names, but are confusingly similar to the geographical names in terms of font and pronunciation, which may cause confusion among the relevant public as to the origin of goods, the trademark shall be deemed having unhealthy influences and be rejected from registration according to Article 10(1)(8) of the Chinese Trademark Law 2001.
4. The geographical names as the foreign geographical names well-known to the public
Article 10(2) of the Chinese Trademark Law 2001 stipulates that “the geographical names as … the foreign geographical names well-known to the public shall not be used as trademarks, but such geographical terms that have other meanings or are part of a collective trademark or a certification mark shall be excluded. Where a trademark using any of the above-mentioned geographical names has been approved and registered, it shall remain valid.”
According to Rule 11(2) of the “Examination on the Signs which Shall Not Be Registered as Trademarks” of Trademark Examination Standard, the marks composed of or containing foreign geographical names well-known to the public shall be deemed identical with the foreign geographical names well-known to the public.
However, if the trademarks are distinctive as a whole composed of geographical names and other letters, which will not cause confusion among the relevant public as to the origin of goods, or the marks contain the geographical names which are separate from the trademark’s other distinctive elements and only indicate the location of the applicant, the marks can be registered and used as trademarks, which can also be concluded from the previously discussed Case 2 to 4.
In addition, if the characters contained in the trademarks are not identical with the geographical names, but are confusingly similar to the geographical names in terms of font and pronunciation, which may cause confusion among the relevant public as to the origin of goods, the trademark shall be deemed having unhealthy influences and rejected from registration under Article 10(1)(8) of the Chinese Trademark Law 2001.
5. Trademarks containing the geographical names inconsistent with the locations of the applicants
According to Rule 11(5) of the “Examination on the Signs which Shall Not Be Registered as Trademarks” of Trademark Examination Standard, the trademark shall be deemed having unhealthy influences and be rejected according to the Article 10(1)(8) of the Chinese Trademark Law 2001, when the trademark consists of geographical name is different from the location of the applicant and is likely to cause confusion among the public.
V. Summary and Suggestions
Based on the above, we set forth suggestions below for foreign applicants when applying for trademark registrations identical with or similar to state name and geographical name:
1. Do not file trademarks identical with or similar to the state name of China.
114 As previously discussed, the registration of trademarks identical with or similar to the state name of China is strictly restricted in China, and may be rejected in accordance with Article 10(1)(1) and Article 10(1)(8) of the Chinese Trademark Law 2001.
2. Submit written documents to prove that the registration of the trademarks identical with or similar to the state names of foreign countries have been approved in these foreign countries and the marks may obtain registration in China.
The registration certificates of the trademarks outside of China may be used as evidence to demonstrate the approval of the registration of these trademarks in these foreign countries.
3. Add elements of strong distinctiveness to the trademarks identical with the geographical names as the administrative divisions at or above the county level in China and the foreign geographical names well-known to the public, and actively and widely use these trademarks to strengthen the distinctiveness and gain reputation to increase the possibility for registration of the trademarks.
4. The geographical names contained in the trademarks shall be consistent with the location of the applicants.
Otherwise, the trademarks will be deemed having unhealthy influences and rejected from registration according to Article 10(1)(8) of the Chinese Trademark Law 2001.
NOTES:
[1] CTMO Refusal Notice No. ZC4953206BH1 [2] TRAB Decision (2008) Shang Ping Zi No. 28028 [3] Beijing First Intermediate Court Administrative Judgment (2009) Yi Zhong Zhi Xing Chu Zi No. 441 [4] Beijing High Court Administrative Judgment (2009) Gao Xing Zhong Zi No. 829 [5] The SPC Administrative Judgment (2010) Xing Ti Zi No. 4 [6] TRAB Re-examination Decision (2008) Shang Ping Zi No. 28028 Re-examination No. 00711 [7] Beijing First Intermediate Court Administrative Judgment (2011) Yi Zhong Zhi Xing Chu Zi No. 2980 [8] Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 290 [9] Beijing High Court Administrative Judgment (2013) Gao Xing Zhong Zi No. 884 [10] Beijing First Intermediate Court Administrative Judgment (2012) Yi Zhong Zhi Xing Chu Zi No. 304 [11] Beijing First Intermediate Court Administrative Judgment (2012) Yi Zhong Zhi Xing Chu Zi No. 352 [12] Beijing First Intermediate Court Administrative Judgment (2012) Yi Zhong Zhi Xing Chu Zi No. 353 [13] TRAB Decision (2013) Shang Ping Zi No. 145959
115 【HOT TOPICS AND TIPS】
Granting Cross-Class Protection where Goods / Services are Deemed Similar - Based on Breakthrough Practices of Trademark Administrative and Judicial Departments on Classification of Similar Goods and Services
Author: Ms. Yan Fang FU, trademark attorney at Beijing East IP Law Firm
I. Key Issues
With China’s rapid economic developments, the relevance of similar goods and services changes with the method of commercial trading, consumption habit, and consumer psychology. However, the Classification of Similar Goods and Services may not include all the goods and services, and there are often contradictions when determining whether goods and services are similar or not. There is a new trend that the Chinese Trademark Office (CTMO), the Trademark Review and Adjudication Board (TRAB), and the courts begin to grant cross-class protection by deeming goods and services similar.
In order to maintain the market order of fair competition and ensure the judicial ruling not contradict with the public interests, it is necessary to break through the Classification of Similar Goods and Services on specific cases.
There are various reasons why cross-Class protection is granted by deeming goods and services similar: difficulties to recognize a trademark as well-known, cracking down bad faith filing, and in-depth understanding about the similarity of goods and services.
In general, the Classification of Similar Goods and Services should be complied with, and should not be easily break through, namely, breaking through the Classification of Similar Goods and Services should be applied stringently and conformed to certain requirements and criterion.
II. Typical Cases
1. BAIDU
In this case, Beijing High Court (the second instance court) affirmed the decision of Beijing First Intermediate Court (the first instance court) where, according to the Classification of Similar Goods and Services, the infringing product falls under Class 9 while the trade mark “BAIDU in Chinese” (Registration No. 1579950) designated for “providing computer information via computer information network, etc.” fall under Class 42. The infringing products MP3 and MP4 media players (as a kind of equipment for downloading or storing audio and video) which are particularly associated with online audio and video searching services approved for the mark “BAIDU in Chinese.” Therefore, the use of the infringing products may cause confusion among the relevant public that there are particular association between the provider of the MP3 and MP4 media players and the online searching engine services provider.
2. ZHEN QIAO in Chinese and ZHENQIAO and Design
116
Beijing High Court (the second instance court) affirmed the decision of Beijing First Intermediate Court (the first instance court) where the goods designated under the disputed trademark “ZHEN QIAO in Chinese and ZHEN QIAO and Design” fall under Class 29, while the goods designated under the cited trademarks fall under Classes 29 and 30 respectively. The courts applied the factors as defined in Rule 11 of the Trademark Adjudication and Examination Standards to determine the similarity of the goods and found that the function, purpose, production department, sales channels, and target consumers of the two trademarks’ designated goods are closely related. Therefore, Beijing High Court affirmed that the goods under the two trademarks constitute identical or similar goods.
3. AI ER in Chinese
The opticians’ services designated under the disputed trademark “AI ER in Chinese” (Registration No. 4040366) and glasses and clinic services designated under the cited trademarks are not similar goods and services according to the Classification of Similar Goods and Services. However, the TRAB holds that optician’ services and glasses, clinic services are closely related in function, purpose, target customs, etc. Moreover, the cited marks enjoy high fame in the medical service industry. The coexistence of the disputed trademark and the cited trademark is very likely to cause confusion among the consumers. Therefore, the TRAB affirmed that the goods designated under the disputed trademark and those designated goods and services under the cited trademarks constitute similar goods/services.
4. banny OFFICE DEPOT
The TRAB holds that the goods “Copying paper [stationery]; Telex paper; etc” designated under the opposed mark and the goods “Stationery; Drawing board; etc” under the cited mark do not constitute similar goods according to the Classification of Similar Goods and Services. However, the court holds that the designated goods fall within the two marks are identical in sales channels, production department and target consumers, and are co-related in function. Therefore, the designated goods under the opposed mark “banny OFFICE DEPOT” and those under the cited mark constitute similar goods.
III. Analysis and Comments
1. Laws and Regulations
(1) Article 30 of the Chinese Trademark Law 2013
Where a trademark registration has been applied for is not in conformity with the relevant provisions of this Law, or is identical with or similar to the trademark of another person that has, in respect of the same or similar goods, been registered or, after examination, preliminarily approved, the Trademark Office shall refuse the application and shall not publish the said trademark.
(2) Rules 11 and 12 of the Supreme People’s Court on Several Questions on the Application of Law in Trial of Trademark Civil Dispute Cases Interpretation
117 Rule 11: The similar goods under Article 52 (1) of the Chinese Trademark Law shall refer to goods with identical function, use, manufacturer, sales channel and target consumers or goods that the relevant public generally think related in a particular way or if is likely to cause confusion.
The similar service shall refer to service with identical purpose, content, mode or object or service with identical objective, content, mode and target consumers, or service that is likely to cause confusion.
The similarity of goods and service means that the goods or service is related to one another in a particular manner, or are likely to cause confusion on the part of the relevant public.
Rule 12: The court shall establish whether or not a goods or service is similar according to the provision of Article 52 (1) of the Chinese Trademark Law in the light of the comprehensive assessment based on the average perception by the relevant public of the goods or service. The International Classification of Goods and Services for the Purpose of Trademark Registration and the Classification for the Purpose of Distinguishing Similar Goods and Services may serve as the frame of reference for establishing similar goods or services.
In addition, Rule 12 thereof prescribed that deem the goods or services similar should consider comprehensively the relevant public’ general understanding; and the Classification of Similar Goods and Services can serve as reference.
(3) Relevant Rules
“By Deeming Similar Goods” Section of Trademark Examination Standard, similar goods shall refer to goods that are identical or similar in function, purpose, main material, manufacturing department, sales channel, sales place and target consumers, etc.
“By Deeming Similar Services” Section of Trademark Examination Standard, similar services shall refer to services that are identical or similar in the purpose, content, mode and places, target customs, etc.
2. Requirements and principle for breaking through Classification of Similar Goods and Services
According to the trial practices of trademark administrative proceedings (TRAB as the defendant), the court and the TRAB’s disagreement in deeming goods/services similar or not is one of the main reasons the TARB lose, and the rate of the TRAB’s losing reaches 17% (2011), 24% (2012) and 22% (2013). In most of these cases, the TRAB was strictly in accordance with the Classification of Similar Goods and Services in deciding goods/services do not constitute similar, while the court breaking the Classification of Similar Goods and Services and deeming the goods/services similar. In the meantime, the TRAB decided that goods/services constitute similar in consideration of the bad faith, relevance and the fame or distinctiveness of the cited mark, while the court affirmed otherwise.
The Classification of Similar Goods and Services is the principle to the CTMO, the TRAB, and courts to decide whether the goods and services are similar or not. Thus, this Classification shall not be broken through easily, or it may cause disorder in deciding goods/services similar and even break the legislative balance between Article 13 (well-known trademark protection) and Article 30 of the Chinese Trademark Law. Therefore, it must satisfy
118 the following requirements and criterion when considering breaking through the Classification of Similar Goods and Services in specific cases. Otherwise, it may disturb the trademark management order and damage the interest of the trademark holders.
(1) Requirement
A. The possibility of similarity between the disputed mark and the cited mark is relatively high;
B. The cited mark is inherently distinctive and bears originality.
C. The designated goods and services under the disputed mark and those under the cited mark are closely related.
D. The applicant is in apparent bad faith.
E. The cited mark enjoys certain fame.
F. The registration and use of the disputed mark is very likely to cause confusion among the relevant public.
The purpose of breaking through the Classification of Similar Goods and Services is to prevent and punish those bad faith application, thus, among the above 6 requirements, items C and D are the most critical factors. Thus, if one claims two trademarks should be deemed similar, he should focus on collecting evidence regarding the fame of prior trademark, the bad faith of the adversary, and the relatedness of goods and services.
(2) Principle
Based on the TRAB review and adjudication precedents, there are also criterions to be complied with:
A. In conformity with the Classification of Similar Goods and Services, breaking through the Classification in specific cases.
B. Protect the prior right and avoid confusion among relevant public, comprehensive consideration of the specific facts of a case, the changing economic life of the goods and services, and other various factors in determining the similarity of goods and services.
C. Clarify the boundaries between breaking Classification of Similar Goods and Services and the cross-protection granted by the well-known marks, specifically, the “breaking through” aims at granting cross-class protection in similar goods/services, the well-known trademark may obtain cross-class protection in “non similar” goods/services.
IV. Summary and Suggestion
Though there has been great progress in the theory and practices of breaking through the Classification of
119 Similar Goods and Services, it is important to note that the principle is that the Classification of Similar Goods and Services should be strictly applied. Breaking through should be applied as an exception. To maintain the trademark management order, the fair competition environment, and to ensure the judicial ruling does not contradict with the public interests, when granting cross-Class protection by deeming goods and services similar, we shall:
1. Make sure to cite and focus on Article 30 of the Chinese Trademark Law 2013 in addition to well-known trademark provisions and bad faith filing provisions.
2. Satisfy the requirements and principles on breaking through the Classification of Similar Goods and Services.
NOTES:
[1] Beijing First Intermediate Court Administrative Judgment (2012) Yi Zhong Zhi Xing Chu Zi No. 1454 [2] Beijing High Court Administrative Judgment (2011) Gao Xing Zhong Zi No. 30 [3] Beijing High Court Administrative Judgment (2012) Gao Xing Zhong Zi No. 1483 [4] TRAB Decision (2012) Shang Ping Zi No. 00665 [5] Ying Qi CUI, “Breakthrough Classification of Similar Goods and Services in Trademark Review and Adjudication,” China Business News, 2012-08-30. [6] Lin XU, “Analysis on Administrative Proceedings of Trademark Review Cases in 2012,” TRAB Legal News Report, 2013(1). [7] Lin XU, “Analysis on Administrative Proceedings of Trademark Review Cases in 2013,” TRAB Legal News Report, 2014(2).
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